China has announced tariffs on $60 billion of U.S. goods in response to $200 billion in tariffs announced by the Trump administration on Chinese goods last week. The economic tit-for-tat has sparked fears of a prolonged trade battle between the two economic powerhouses.
The hike in Chinese tariffs came hours after President Trump warned Beijing not to retaliate for the U.S.’ increase of tariffs on Chinese goods.
“I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out!” the President wrote on Twitter this morning.
Trade negotiations between the U.S. and China – which have lasted several months – have hit serious speed bumps in recent weeks. The Trump administration had given China 3 to 4 weeks to sign a deal or face an additional 25% in tariffs on $325 billion more of Chinese products.
The heightened tensions sent financial markets tumbling today. The DJIA closed down over 600 points, while the S&P fell 70 and the NASDAQ closed nearly 300 points lower than it opened.
Today’s tariffs announced by China effect products as varied as meat, soda, wood flooring, carpets, furniture, watches and clocks, coffee makers, hair dryers, fertilizers, granite, marble, chalk and sandstone.
Economists worry that increased costs will be passed on to U.S. consumers. President Trump dismissed those worries however, saying tariffs can be avoided if purchases are made from countries that are not being charged tariffs or, ideally, buying them in the U.S.
“There is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today…Tariffs can be completely avoided if you buy from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs,” the President wrote on Twitter.
Photo by Marlith via Wikimedia Commons