Published: Sun, August 25, 2019
Markets | By Otis Pena

China announces new round of retaliatory tariffs on US goods

China announces new round of retaliatory tariffs on US goods

The country's commerce ministry announced on Friday that 5,078 USA -made goods will see a tariff of between 5 and 10 per cent soon.

Baier noted how supporters of Trump have expressed praise of Trump's strategy of imposing tariffs on China in response to China taking advantage of the previous administrations.

The tariff is a retaliation after President Trump revealed plans for a 10% tax on $300bn of goods from China.

The Dow Jones Industrial Average dropped more than 620 points Friday after the president directed tweets at China and Federal Reserve Chairman Jerome Powell.

"My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?", Trump asked.

The move follows China's announcement earlier in the day that it would impose tariffs of 5% or 10% on $75 billion of US goods and reinstate duties on American cars. "We never had 10 cents coming into our treasury; now we have billions coming in" he said on 24 January 2019.

"The Chinese side hopes that the U.S. 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", the Chinese State Council said in a statement. "It is incredible that they can speak' without knowing or asking what I am doing, which will be announced shortly". After Trump's tweets, US stocks dropped - the S&P 500 Index closed 2.6% down on the day.

The administration of US President Donald Trump hit back, saying it will raise existing tariffs on 250 billion dollars' worth of Chinese imports to 30 percent from the current 25 percent.

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He went on to say that beginning on September 1 (next Sunday), the remaining 300 billion dollars in imports from China that already has a 10 percent tax will rise to a 15 percent tax.

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".

Earlier Friday, the president said he "hereby ordered" US companies to seek alternatives to doing business in China. "So I think the President's conduct may well be within the letter of the law here". "China was forced to take countermeasures". In a note to clients, the bank's Global Research team writes that "the ebb and flow in consumer confidence seems squarely tied to the U.S. I'm completely surprised by it", said Alison Acosta Winters, senior policy fellow at Americans for Prosperity, a conservative group. The timing may have been intentional, as Trump name-checked Powell in his tweetstorm, calling him an "enemy". He repeatedly lauds the nation's economic prowess, while saying economies elsewhere in the world are in trouble. "So, President Trump said, 'Look, we are going to protect the American economy, American workers, American businesses, ' and that's a really good thing".

In response to China raising tariffs on US goods, Trump also said he was raising existing tariffs of 25% on certain Chinese goods to 30% and raising tariffs on another round of Chinese products from 10% to 15%. The new tariffs are set to be imposed in two stages on 1 September and 15 December.

"But all this is a reminder that the only closed economy is the global economy".

"The global growth outlook has been deteriorating since the middle of previous year". Top of the agenda would be the "economic global situation", Macron said, and how to "decrease tensions and fix the situation in terms of trade".

The conflict has taken a toll across the globe. 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 US auto plant. When exports fall, manufacturers typically react by reducing inventories and cutting production, which can lead to job cuts. This phenomenon, which suggests investor faith in the economy is faltering, has preceded every recession in the past 50 years.

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