US-China trade war continues to escalate

China retaliated against the U.S. by placing tariffs on $60 billion of U.S. goods.
3:29 | 05/13/19

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Transcript for US-China trade war continues to escalate
Moving on to China. China is retaliating after the US to raise tariffs to tweak by percent. Point 200 billions dollars worth of goods on Friday and today China said. It will hike in ports heroes five to 25%. Against sixty billion dollars worth of US goods starting on June 1 so. I want to go to Karen Travers he's at the White House. Not care and you know this is the conversation that's been on your radio calls all morning. Just give us an idea of what people are saying. And this is the latest chapter in what has been an escalating trade war between the US and China that the kind of last year Kimberly the president and China's president she agreed to put things on hold hit the pause button on that constant ratcheting up of Tarrant and tensions. But deadlines have come and gone and talks last week here in Washington did not end with an agreement so the president threatened to raise tariffs by the end of the week he did just that and this morning China responded. And the president insists that it what he's doing is as tough stand to get China into the negotiating table and he also insisted China. Is going to pay for these terrorists. Just didn't break this down you know in simple terms it would tariffs are of course taxes on imports so China not handing over money to the US treasury. These are costs that'll be heating American companies and then that could be passed down to American consumers. Kimberly yesterday the president's top economic advisor Larry Kudlow is on Fox News and press really hard on some of the claims the president has made about these parents. And here's what he had to say. It's not China that pays tariffs kids the American importers the American companies. That pay what in effect as a tax increase. And oftentimes passes it on to US consumers. Are fair enough air in fact both sides will pay both sides shall pay and these things. And of course. It portends to tariffs on goods coming into the country the Chinese aren't pet and pet no but the Chinese rules suffer GDP losses and so forth. I'm with respect to a diminishing export market. And goods that they may need for their own I just can't expect to the president says China doesn't. That China it pays that Arabs they may suffer consequences but it's the US. Businesses and US consumers who paid correctly yes to some extent and yet I don't disagree with that again both sides both sides shall suffer on this. And that right there is Larry Kudlow saying what almost all economists will say that this is a cost that will be paid by the American companies who were importing products and goods from China and then potentially American consumers but has also saying netted the administration believes that there will be a slowdown in growth in China's economy and that's enough to put this pressure on them right now the president though he. Is alone in that position that he keeps putting out there on Twitter that this is something that goes directly from China into the US treasuries so pretty start comments there from Larry Kudlow. On Fox News on Sunday. And Karen do you think people care do you think it matters that there's a discrepancy between what Kudlow saying what trump is saying. I mean it's not even just between the president Larry Kudlow it's between the president and all economists were looking at this issue. The president is trying to spin this specially as the market today are really taking a hit as investors are concerned about what this latest round of tit for tat in the trade war means between the US and China. All right Karen Travers at the White House thank you so much for the updates we appreciate that.

This transcript has been automatically generated and may not be 100% accurate.

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