The trade war between the United States and China just got hotter as President Donald Trump slapped tariffs on $200 billion in Chinese goods.
The tariffs are set to begin on Sept. 24 with a levy of 10 percent, before ramping up to 25 percent on Jan. 1.
In a statement, Trump warned that “if China takes retaliatory action against our farmers or other industries, we will immediately pursue Phase Three, which is tariffs on approximately $267 billion of additional imports.”
Trump explained that the new round of tariffs is justified because of unfair trade practices by China.
“[The U.S. Trade Representative] concluded that China is engaged in numerous unfair policies and practices relating to United States technology and intellectual property—such as forcing United States companies to transfer technology to Chinese counterparts.”
“These practices,” Trump said, “plainly constitute a grave threat to the long-term health and prosperity of the United States’ economy.”
China has, for months, refused American demands that it change unfair trade practices, Trump said.
This second round of tariffs follows on tariffs of 25 percent on $50 billion in Chinese goods that Trump announced on June 15. The Chinese matched those tariffs, with duties on American imports. However, because of the trade imbalance between the United States and China, Beijing won’t be able to continue matching Trump’s tariffs.
Chinese leaders said that if Trump levied this second round of tariffs, that they would withdraw from planned trade talks. Trade talks in July were unproductive.
Financial journalists have speculated that China may seek to exact pain on the United States through means other than tariffs, such as by harassing U.S. companies doing business in China, disrupting supply chains for American companies that originate in China, or causing mischief with, for instance, attempts by the United States to negotiate with North Korea over its nuclear arsenal.
Meanwhile, in a tweet on the morning of Sept. 17, Trump spoke of the effectiveness of tariffs as an economic weapon:
“Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be ‘Tariffed!’”
