President Trump announced his administration would be imposing $50 billion on Chinese made goods entering the U.S. The measures, the President said, are aimed at correcting what he called, “the largest deficit of any country in the history of our world.”
“It’s out of control,” he added.
The taxes are aimed at intellectual property theft and violations of technology transfer agreements that have served as disadvantages for U.S. companies and disagreements, he said.
The administration will have fifteen days to release a list of Chinese goods and sectors that will be subject to the tariffs. U.S. Trade Representative Robert Lighthizer will oversee the process. A thirty-day public comment period will follow. The White House didn’t disclose which products or industries might be affected but assured the list would be “long.”
The President also requested that Trade Representative Lighthizer bring cases in the World Trade Organization against China’s “discriminatory licensing practices,” and asked the Treasury Department to propose even more actions within 60 days on Chinese investment in industries or technologies important to the U.S.
The President is bringing the motions under Section 301 of the 1974 Trade Act which authorizes a U.S. President to take retaliatory measures against a foreign government that violates trade agreements with the U.S.
China has vowed to retaliate.
“China would fight to the end to defend its own legitimate interests with all necessary measures,” China’s embassy in Washington said a statement late today. “China is not afraid of and will not recoil from a trade war.”
President Trump made bringing the nation’s trade deficit into balance one of his main campaign promises during the 2016 presidential election. “Past presidents should never have allowed this to happen,” the President said today. “We got stuck with a lot of beauties, but we’ll fix them.”
In addition to the tariffs, the President also announced that he has asked China to reduce their trade deficit with the U.S. by $100 billion.
“The word is “reciprocal,”’ the President said at today’s event. “That’s the word I want everyone to remember. We want reciprocal…If they charge us, we charge them the same thing. That’s the way it’s got to be. That’s not the way it is. For many, many years — for many decades, it has not been that way.”
Market indices dropped on news of the tariffs with investors fearful of a trade war. The Dow Jones Industrial Average lost 724 points on the day – nearly 3%. Large U.S. manufacturers like Boeing and Caterpillar took heavy losses on fears of slower economic growth and limited global expansion.