China trade war deteriorates

Daniel Fowler
August 25, 2019

On Friday, China unveiled a new round of retaliatory tariffs on about $75 billion worth of USA goods, the latest escalation in an on-going trade war that's putting a strain on the world's two largest economies.

The communist country will also resume duties on American cars, according to CNBC. The pending 10% tariff on another $300 billion in goods would hit everything from toys to clothing and shoes that China ships to the United States, however some 60% of the new tariffs wouldn't go into effect until mid-December, and others were taken off the table altogether.

Trump's latest tariff move, announced on Twitter, said the United States would raise its existing tariffs on $250 billion worth of Chinese imports to 30% from the current 25% beginning on October 1, the 70th anniversary of the founding of the communist People's Republic of China. The United States will begin imposing those tariffs on some products starting September 1, but tariffs on about half of those goods have been delayed until December 15. The president followed that move with a series of angry tweets in which he said he "hereby ordered" American companies to start looking for alternatives to making products in China, although it's not clear what authority the president has to issue such an order.

The trade war between the US and China has been rattling financial markets, disrupting global trade and weakening prospects for worldwide economic growth.

"The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP", Trump tweeted.

After markets closed, Trump weighed by slapping new tariffs on $450 billion of additional Chinese products. "It is incredible that they can "speak" without knowing or asking what I am doing, which will be announced shortly", Trump said Friday in a tweet, following the release of prepared remarks by Fed Chairman Jerome Powell at the Kansas City Fed's annual symposium in Jackson Hole, Wyoming. Our presence in China allows us to reach Chinese customers and develop overseas markets.

Q&A Who pays Trump's tariffs, China or United States customers and companies?

The latest salvos in the trade war sent global financial markets tumbling.

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Soon, Manchester United recognized their error, before using the opportunity to aim a cheeky dig at their league rivals. Andros Townsend, Christian Benteke, Max Meyer and Scott Dann all drop to the bench.

Trump also said on Twitter on Friday that the economy was "strong and good", while "the rest of the world is not doing so well".

India will be watching these developments very closely as the only other country, apart from China, to have hit back against Trump's unilateral duty hikes.

By the end of the trading day Friday, the Dow Jones industrial average had fallen 600 points, or almost 2.4 percent.

"The Chinese side hopes that the US will continue to follow the consensus of the Osaka meeting, return to the correct track of consultation and resolve differences, and work hard with China to end the goal of ending economic and trade frictions".

Twelve rounds of talks have failed to break the impasse, though more negotiations are expected next month.

Washington accuses China of using predatory tactics - including outright theft of U.S. trade secrets - in an aggressive drive to turn itself into a world leader in cutting-edge technologies such as artificial intelligence and electric cars.

While Beijing worked for three weeks on its multi-tiered tariff response, Trump's promised retaliation - which came in a signature tweetstorm - was announced in less than 10 hours. Beijing had planned those tariff hikes a year ago but temporarily dropped them to keep the talks going. The exports are down from about 262,000 in 2017.

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