DONALD Trump escalated the trade war with China by upping tariffs and ordering US firms to leave the Asian superpower.
Stocks tumbled after Trump’s tirade, sending the Dow Jones Industrial Average plummeting 623 points, or 2.4%.
Trump branded Chinese President Xi Jinping an ‘enemy’[/caption]
Trump blamed Jerome Powell, the man he appointed as chairman of the Federal Reserve, for the state of the domestic economy.
He questioned who was a “bigger enemy” of the US – Powell or Chinese President Xi Jinping.
Trump’s attack came after Beijing announced Friday morning that it had raised taxes on US products.
The president appeared caught off-guard by China’s tariff increase, and was angry when he gathered with his trade team in the Oval Office before departing for France, sources claim.
He then fired off a series of tweets, accusing China of taking “advantage” of the US.
Trump said he would be raising planned tariffs on $300 billion in Chinese goods from 10% to 15%.
The Office of the U.S. Trade Representative also said existing tariffs on another $250 billion in Chinese imports would go from 25% to 30% on October 1 after receiving feedback from the public.
Trump also tweeted the he “hereby ordered” all American companies in China to start looking for alternatives bases.
He tweeted: “Our Country has lost, stupidly, Trillions of Dollars with China over many years.
“They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year and they want to continue.
“I won’t let that happen! We don’t need China and, frankly, would be far better off without them.
“The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”
Trump’s latest escalation will impose a burden on many American households.
Even before he announced an increase Friday, J.P. Morgan had estimated that Trump’s tariffs would cost the average household roughly $1,000 (£814) a year if he proceeded with his threats.
Businesses large and small joined in a chorus of opposition to the intensifying hostilities.
“It’s impossible for businesses to plan for the future in this type of environment,” said David French, senior vice president of government relations at the National Retail Federation.
“The administration’s approach clearly isn’t working, and the answer isn’t more taxes on American businesses and consumers. Where does this end?”
The impact could be sweeping for consumers.
“With each percentage point added to the tariff hikes, it becomes more and more difficult for importers not to pass the costs on to the U.S. consumer,” said Wendy Cutler, a former U.S. trade negotiator now at the Asia Society Policy Institute.
“And this is not to mention the uncertainty that these increases contribute to the overall business environment.”
If Trump goes ahead with all the tariffs he’s announced, they would cover just about everything China ships to the United States.
China, for its part, slapped new tariffs of 5% and 10% on $75 billion of U.S. products in retaliation.
Like Trump’s, the Chinese tariffs will be imposed in two batches first on September 1 and then on December 15.
China will also go ahead with previously postponed import duties on US-made autos and auto parts, the Finance Ministry announced.
The 13-month-long feud between the U.S. and China has been rattling financial markets, disrupting international trade and weakening prospects for worldwide economic growth.
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 tech.
Some 12 rounds of talks have failed to break the impasse, though more negotiations are expected next month.
Chinese leaders have offered to alter details of their policies but are resisting any deal that would require them to give up their aspirations to become a technological powerhouse.
The two countries are also deadlocked over how to enforce any agreement.
China’s announced tariff hikes and Trump’s response are the latest signs that both countries are digging in.
Tariff increases on September 1 apply to 1,700 items ranging from frozen sweet corn, dried beef and pork liver to marble, other building materials and bicycle tires.
Penalties that take effect December 15 cover 3,300 items including coffee, cinnamon, industrial chemicals and scissors, the ministry said.
The Chinese said tariffs of 25% and 5% would be imposed on U.S.-made autos and auto parts on December 15.
Beijing had planned those tariff hikes last year but temporarily dropped them to keep the talks going.
BMW, Tesla, Ford and Mercedes-Benz are likely to be the hardest hit by the Chinese auto tariffs.
In 2018, BMW exported about 87,000 luxury SUVs to China from a plant near Spartanburg, S.C.
It exports more vehicles to China than any other U.S. auto plant.
Together, Ford, BMW, Mercedes and others exported about 164,000 vehicles to China from the U.S. in 2018, according to the Center for Automotive Research, a think tank in Ann Arbor, Michigan.
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Most of them are luxury cars and SUVs with higher profit margins that can cover higher U.S. wages. The exports are down from about 262,000 in 2017.
Tesla, which is building a plant in China, last year got about 12% of its revenue by exporting about 14,300 electric cars and SUVs from California to China, according to Barclays.
Most of Ford’s exports are from the Lincoln luxury brand, but most of the vehicles it sells in China are made in joint-venture factories.