The United States and China exchanged blows on Friday as each side increased punitive tariffs on the other, intensifying a trade war that threatens to engulf the global economy.
In a rapid back-and-forth, Beijing took action against $75 billion in American goods in response to US tariffs announced on August 1, and President Donald Trump lashed out in return by increasing existing and planned tariffs on a total of $550 billion in Chinese products.
Trump’s blistering Twitter screeds called into doubt chances for a quick resolution to the trade war between the world’s economic superpowers, which by the end of the year will cover nearly all imports and exports exchanged between the two countries.
Accusing China of “taking advantage of the United States on Trade, Intellectual Property Theft, and much more,” Trump said, “we must Balance this very…. …unfair Trading Relationship.”
Existing 25% tariffs on $250 billion in Chinese goods will increase to 30% starting October 1, Trump said.
And tariffs on $300 billion in products, due to take effect on September 1 at 10%, will now be set at 15%, he said.
“China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!).”
Rapid US response
While Beijing worked for three weeks on its multi-tiered tariff response, Trump’s promised retaliation – which came in a signature tweetstorm – was announced in less than 10 hours.
The rapidly changing conflict worries US companies, many of whom rely on China for inputs, for finished products they sell and for manufacturing.
“It’s impossible for businesses to plan for the future in this type of environment,” said David French of 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?”