Posted on 05/13/2019 8:55:25 AM PDT by Red Badger
Key Points
China will raise tariffs on $60 billion in U.S. goods in retaliation for the Trump administration’s latest decision to increase duties on $200 billion worth of Chinese products.
U.S. stock indexes fall about 2% as the trade war between the world’s two largest economies escalates.
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China will raise tariffs on $60 billion in U.S. goods in retaliation for the U.S. decision to hike duties on Chinese goods, the Chinese Finance Ministry said Monday.
Beijing will increase tariffs on more than 5,000 products to as high as 25%. Duties on some other goods will increase to 20%. Those rates will rise from either 10% or 5% previously.
The move follows President Donald Trump’s decision to raise duties on $200 billion in Chinese products to 25% from 10%. The world’s two largest economies have struggled to sign a trade deal and end a widening conflict that threatens to damage the global economy.
The latest shot in the trade war rattled investors. Major U.S. stock indexes dove more than 2% Monday amid the escalation.
The duties in large part target U.S. farmers, who largely supported Trump in 2016 but suffered from previous shots in the Trump administration’s trade war with China. The thousands of products include peanuts, sugar, wheat, chicken and turkey.
Neither the White House nor the Treasury Department immediately responded to CNBC’s requests to comment on the tariff increase.
In increasing duties on Chinese goods on Friday, the White House said Beijing backed out of major parts of a developing trade agreement. While Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer met with Chinese negotiators last week in talks Mnuchin called “constructive,” the sides could not strike a deal.
Trump, who wants to address grievances such as intellectual property theft, forced technology transfers and trade deficits, pushed China to make a deal ahead of its retaliation on Monday morning. In a string of tweets, the president argued the tariffs are “very bad for China.” He said “China should not retaliate” as it “will only get worse!”
“You had a great deal, almost completed, & you backed out!” he wrote of China and its President Xi Jinping.
The U.S. may not be done retaliating. Trump has hreatened to put 25% tariffs on $325 billion in Chinese goods that remain untaxed. The president has signaled he is content leaving the duties in place, arguing they will damage China more than the U.S.
The president has repeatedly claimed China bears the brunt of the costs from the tariffs. But the burden falls largely on U.S. businesses and consumers.
Pressed Sunday during a Fox News interview about Americans paying the tariffs, Trump’s top economic advisor Larry Kudlow responded, “Fair enough. In fact, both sides will pay.”
Despite this, Trump claimed in a tweet Monday that “there is no reason for the U.S. Consumer to pay the Tariffs.” He also said the tariffs “can be completely avoided if you by (sic) from a non-Tariffed Country, or you buy the product inside the USA (the best idea).”
The U.S. hopes to revive discussions as it tries to reach a deal. On Sunday, Kudlow said there is a “strong possibility” Trump will meet with Xi during the G-20 summit in Japan next month.
— CNBC’s Kevin Breuninger and Tucker Higgins contributed to this report
Good let’s focus on song business with friendly nations and ones that dont steal our intellectual property.
And Malaysia, Indonesia, Burma, etc. etc. etc. are priming their pumps to take up the slack.
Die China Die!
Of course the surrender monkeys prefer continuing to let China rape us.
Not surprising.
What do they import?
Fortune Cookies and cheap chopsticks?
Game on!
The economy that has to import food and energy and must have a positive $500 billion surplus in the balance of trade is going to lose big time.
I look for food prices in the US to drop.
HA..let them eat Pork...../snicker.
And stop exporting chopsticks from USA.
Bring it on. It’s time to stop allowing China to use the US as a dumping-ground for their goods.
Yawn.
Who is worse the rapist or the ones that hold the victim down and tell her to relax and enjoy it?
It was interesting to view my retirement stock portfolio and see what was going up this morning-- REITs, Gold funds, Utilities among them.
Cool. They want to fight over it...
Finally, a President who is taking China seriously.
Has the left accused him of starting WW3 with China yet?
Just my take, but I think we are going to win.
We tariff $200 B worth of Chinese goods, and China responds (not retaliates) by tariffing $60 B worth of US goods.
I see this as a face-saving move by China, signaling that they are not hitting back as hard as they can, and that they are open to a deal...
Looking forward to prices of all those commodities to drop.
Trump has been talking about China since day one.
CNBC isn’t smart enough to assess the short and long run impacts of this.
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