After China announced a new round of retaliatory tariffs on U.S. goods on Friday, President Trump struck back later in the day by raising the rate of U.S. tariffs on Chinese goods.
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The president said in a series of tweets that $250 billion in Chinese goods currently tariffed at a rate of 25% will increase to 30% beginning Oct. 1. The remaining $300 billion in goods, set to see a 10% tariff rate on Sept. 1 or Dec. 15, will be taxed at 15%.
In his tweets, the president scolded China for imposing fresh tariffs, calling them “politically motivated.”
But the new Chinese tariffs amounted to direct retaliation to the United States latest round of tariffs.
For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more. Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight....— Donald J. Trump (@realDonaldTrump) August 23, 2019
The tweet storm came as the president was preparing to meet world leaders to discuss the global economy and after China announced it would impose tariffs on $75 billion worth of U.S. imports in retaliation for duty hikes the United States pledged to slap on Chinese imports starting next month.
The announcement also came just before the chairman of the Federal Reserve gave a speech investors and analysts planned to scrutinize for signs of how the central bank would address worries of a slowing economy -- and as President Trump sent mixed messages on tax cuts.
Fed chair Jerome Powell suggested Friday that Trump’s trade wars were contributing to a possible global slowdown – and he said they have made it more difficult for the Fed to set policies on interest rates, according to the Associated Press. Powell did not offer any clear signal on further cuts to interest rates, though, during his widely watched remarks in Jackson Hole, Wyo., according to the AP.
....My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?— Donald J. Trump (@realDonaldTrump) August 23, 2019
China said that it would impose its new penalties on two batches of goods, on Sep. 1 and Dec. 15, according to the official Chinese news agency Xinhua. It said 5,078 American products would see duty hikes of 5 or 10%, and that on Dec. 15, it would hit "American-made vehicles and auto parts" with tariffs of 5 or 25%, according to Xinhua.
Those dates match when the Trump administration said a 10% tariff would go into effect on $300 billion worth of imports from China.
After China announced the move, Trump lashed out on Twitter. "We don’t need China and, frankly, would be far... better off without them," he wrote.
Trump also said "American companies are hereby ordered to immediately start looking for an alternative to China," and he said he was "ordering all carriers" -- including, he said, the U.S. Postal Service, FedEx, UPS, and Amazon -- to "SEARCH FOR & REFUSE" deliveries of fentanyl.
....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..— Donald J. Trump (@realDonaldTrump) August 23, 2019
It was unclear under what authority the president thought he had to tell private companies how to conduct their business, and he did not elaborate. He said he would offer further reaction to the Chinese tariff announcement Friday afternoon, but he and the White House offered no explanation of what he meant.
White House trade adviser Peter Navarro earlier in the morning downplayed China's announcement as "well anticipated."
"When China reacts like this, what they simply do is strengthen the resolve of this president," Navarro said in an interview with CNN, referring to Trump.
The U.S. Chamber of Commerce said that "continued tit-for-tat escalation between the U.S. and China is putting significant strain on the U.S. economy, raising costs, undermining investment, and roiling markets."
"While we share the President’s frustration, we believe that continued, constructive engagement is the right way forward," Myron Brilliant, the Chamber's executive vice president and head of international affairs, said in a statement.
Trump planned to depart for France later Friday to attend a meeting of the Group of Seven, or G7, major industrialized nations, where the state of the world's economy will take center stage.
Those nations' leaders are scheduled to attend a meeting on the global economy on Sunday morning -- a session added at the last minute at the United States' request, according to a senior U.S. administration official.
This week, as the economy flashed warning signs of a possible downturn, the president suggested a variety of remedies -- even as he argued they were unnecessary.
He and his senior advisers have tried to stave off consumer concerns about a possible recession -- arguing the economy is strong, even as they discuss potential fiscal boosts.
After Trump first said earlier this week he was considering a payroll tax cut, he reversed himself and nixed that idea the next day. He has also floated indexing and a capital gains tax cut.
Then, on Thursday, his top economic adviser, Larry Kudlow, told reporters that the White House was not considering any short term actions to jolt the economy but is developing a long-term "tax cuts 2.0 plan," possibly to be unveiled during the 2020 campaign.
Trump on Friday morning argued in a tweet that the economy was "strong and good, whereas the rest of the world is not doing so well."
He has made the economy a central message of his campaign, and he accused the news media and Democrats of wanting a recession in order to tank his reelection chances.
The Economy is strong and good, whereas the rest of the world is not doing so well. Despite this the Fake News Media, together with their Partner, the Democrat Party, are working overtime to convince people that we are in, or will soon be going into, a Recession. They are.....— Donald J. Trump (@realDonaldTrump) August 23, 2019