Trump Escalates Trade War With China
WASHINGTON (Dispatches) – U.S. stocks stumbled early Tuesday, the morning after President Donald Trump threatened an all-out trade war with China.
Trump directed the U.S. Trade Representative to prepare new tariffs on $200 billion in Chinese imports. The tariffs, which Trump wants set at a 10% rate, would be the latest round of punitive measures in an escalating dispute over the large trade imbalance between the two countries.
Trump recently ordered tariffs on $50 billion in Chinese goods. The tariffs were quickly matched by China on U.S. exports, a move that drew the president's ire.
"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," Trump said in a statement Monday announcing the new action. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong."
Trump said that if China responds to this fresh round of tariffs, then he will move to counter "by pursuing additional tariffs on another $200 billion of goods."
China's government on Tuesday denounced Trump's threat of the new tariffs as blackmail and warned it would respond with "strong countermeasures."
The Commerce Ministry warned Beijing is ready to "defend the interests of the Chinese people and enterprises" but gave no details.
"This practice of extreme pressure and blackmail deviates from the consensus reached by two parties through many negotiations, and it also disappointed the international community," said the forcefully worded statement.
"If the U.S. side becomes irrational and issues the list, China will have to adopt measures that are comprehensive measures in quantity and quality in order to make strong countermeasures."
It wasn't immediately clear when the new tariffs could be put in place, as the trade office has yet to identify the Chinese goods to be penalized or conduct a legal review. The first round of penalties announced by both nations is set to take effect July 6.
The intellectual property sanctions were the latest in a spate of protectionist measures unveiled by Trump in recent months that included tariffs on steel and aluminum imports to the U.S. and a tough rhetoric on trade negotiations from North America to Asia.
The escalation in the dispute with China may also serve as a warning to other trading partners with whom Trump has been feuding, including Canada and the European Union.
The move quickly drew praise from former Trump senior adviser Steve Bannon, who told The Associated Press: "President Trump told China and the world tonight that America will not back down when it comes to economic aggression."
But Wall Street viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump's watch. Gary Cohn, Trump's former top economic adviser, said last week that a "tariff battle" could result in price inflation and consumer debt - "historic ingredients for an economic slowdown."
Trump had announced a 25% tariff on up to $50 billion in Chinese imports. China is retaliating by raising import duties on $34 billion worth of American goods, including soybeans, electric cars and whiskey. Trump also has slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies.
Trump directed the U.S. Trade Representative to prepare new tariffs on $200 billion in Chinese imports. The tariffs, which Trump wants set at a 10% rate, would be the latest round of punitive measures in an escalating dispute over the large trade imbalance between the two countries.
Trump recently ordered tariffs on $50 billion in Chinese goods. The tariffs were quickly matched by China on U.S. exports, a move that drew the president's ire.
"China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," Trump said in a statement Monday announcing the new action. "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong."
Trump said that if China responds to this fresh round of tariffs, then he will move to counter "by pursuing additional tariffs on another $200 billion of goods."
China's government on Tuesday denounced Trump's threat of the new tariffs as blackmail and warned it would respond with "strong countermeasures."
The Commerce Ministry warned Beijing is ready to "defend the interests of the Chinese people and enterprises" but gave no details.
"This practice of extreme pressure and blackmail deviates from the consensus reached by two parties through many negotiations, and it also disappointed the international community," said the forcefully worded statement.
"If the U.S. side becomes irrational and issues the list, China will have to adopt measures that are comprehensive measures in quantity and quality in order to make strong countermeasures."
It wasn't immediately clear when the new tariffs could be put in place, as the trade office has yet to identify the Chinese goods to be penalized or conduct a legal review. The first round of penalties announced by both nations is set to take effect July 6.
The intellectual property sanctions were the latest in a spate of protectionist measures unveiled by Trump in recent months that included tariffs on steel and aluminum imports to the U.S. and a tough rhetoric on trade negotiations from North America to Asia.
The escalation in the dispute with China may also serve as a warning to other trading partners with whom Trump has been feuding, including Canada and the European Union.
The move quickly drew praise from former Trump senior adviser Steve Bannon, who told The Associated Press: "President Trump told China and the world tonight that America will not back down when it comes to economic aggression."
But Wall Street viewed the escalating trade tensions with wariness, fearful they could strangle the economic growth achieved during Trump's watch. Gary Cohn, Trump's former top economic adviser, said last week that a "tariff battle" could result in price inflation and consumer debt - "historic ingredients for an economic slowdown."
Trump had announced a 25% tariff on up to $50 billion in Chinese imports. China is retaliating by raising import duties on $34 billion worth of American goods, including soybeans, electric cars and whiskey. Trump also has slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies.