Trump hits China with new tariffs in trade war escalation
The president denounces China’s retaliatory tariffs as ‘politically motivated’ and orders U.S. companies to find an alternative to doing business with China.
08/23/2019 10:25 AM EDT
Updated08/23/2019 08:11 PM EDT
President Donald Trump on Friday lobbed Twitter attacks at China, U.S. companies and his handpicked Federal Reserve chief as he further escalated his tariff battle with the world’s No. 2 economy — a reflection of Trump’s rising anxiety about an increasingly troubled economic picture at home.
Trump responded with fury after taking a pair of blows Friday morning when China announced a fresh round of tariffs and Fed Chairman Jay Powell did not explicitly pledge aggressive interest rate cuts as the president demanded.
Erupting on Twitter, the president denounced China’s retaliatory tariffs as “politically motivated,” after earlier ordering U.S. companies to find an alternative to doing business with China and suggesting Powell could be a “bigger enemy” than China’s communist leader.
Trump on Friday evening struck back at China by saying he would hike already existing tariffs on $250 billion in Chinese imports from 25 percent to 30 percent starting Oct. 1. In addition, tariffs on $300 billion worth of other goods would increase from 10 percent to 15 percent as originally planned starting on Sept. 1.
Trump said in announcing the tariff hikes that he'd done so because "in the spirit of achieving Fair Trade, we must Balance this very unfair Trading Relationship" with China, which he said had become a "great burden" to taxpayers.
It was unclear exactly what Trump meant with his directive to the U.S. companies or whether he plans additional action to execute the order, but the tweets captured the president's frustration as his escalating trade war with China weighs on the economy and heightens the risk of a recession during an election year.
"Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue," Trump wrote. "I won’t let that happen! We don’t need China and, frankly, would be far better off without them."
He continued, "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 your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States."
Investors had been in a relatively forgiving mood after China‘s tariffs and the Fed speech on Friday. But Trump’s tweets triggered a sharp sell-off in the stock market, with the Dow Jones Industrial Average down more than 600 points and the S&P 500 tumbling about 2.6 percent by the end of trading. The president’s own tariff escalation came an hour after regular trading closed for the week.
Trump’s initial tweets took the president’s aides by surprise, triggering the latest instance of the White House making policy on the fly after Trump issued a directive via Twitter. Trump huddled midday with his economic team including trade adviser Peter Navarro, U.S. Trade Representative Robert Lighthizer, National Economic Council Director Larry Kudlow and Treasury Secretary Steven Mnuchin, who was on vacation and called into the meeting by phone, according to a senior administration official.