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President Donald Trump has threatened China with new tariffs on a whopping $200 billion worth of goods, further escalating the burgeoning trade war between the world’s two largest economies.
“[T]hese tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” Trump said in a statement late Monday.
On June 15, after months of threatening China with massive import taxes, Trump officially announced a 25 percent tariff on $50 billion worth of Chinese goods. The administration said $34 billion worth of Chinese goods will be subject to tariffs starting July 6, with an additional $16 billion worth of products undergoing further review and public hearings.
China quickly retaliated, claiming it would strike back with tariffs of the “same strength.” It said it would specifically target industries that would hit Trump supporters hard, including American farmers and industrial workers in the Midwest.
Now Trump is threatening yet another 10 percent tariff on $200 billion worth of Chinese imports, asking officials to draw up a list of goods that could be subject to taxes.
China’s commerce ministry quickly responded to Trump’s new tariffs, calling his practices “blackmailing.”
“The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the US, but of the world,” Chinese officials said in a statement.
Trump’s tariff threats are already hurting the Chinese economy: On Tuesday, China’s currency, the yuan, depreciated in value, and the Shanghai stock market plunged to its lowest numbers in two years.
White House trade adviser Peter Navarro said at a press conference Tuesday that China has more to lose than the US in any trade war — a sentiment Trump has also expressed. Back in March, Trump tweeted that “trade wars are good, and easy to win.”
But US business leaders aren’t convinced: Two of the country’s largest business lobbying groups, the US Chamber of Commerce and the Business Roundtable, said last Friday that a trade war with China would harm US manufacturers, farmers, and consumers.
“This is not the right approach,” Tom Donohue, president of the US Chamber of Commerce, said.
Trump thinks China uses dirty trade tactics
Trump said China’s trade practices are “unfair,” claiming that China forces foreign companies to spill US technology secrets to do business with the country. Although the two nations were trying to avert a trade war in the past few weeks, those discussions are now “invalid,” according to Chinese officials.
China reportedly wants to have a booming technology industry by 2025, while Trump wants to win over American voters by appearing strong in his efforts to thwart China’s “aggressive behavior.” Without a clear compromise, the trade disputes will likely escalate.
“The actions President Trump has taken are purely defensive in nature; they are designed to defend the crowned jewels of American technology from China’s aggressive behavior,” Navarro said Tuesday.
He added that Trump still has a “great relationship” with Chinese leader Xi Jinping and will continue to work with him on “a wide range of issues.” This could be vital for Trump to maintain good relations with North Korean leader Kim Jong Un, who recently visited China.
But in terms of trade, it doesn’t seem like either country is willing to back down.
