Trump announces new tariffs on China worth $300 bln

US President Donald Trump announced on Thursday that he would impose new tariffs on US$300 billion worth of Chinese imports after a high-level trade mission that, Trump said, produced too little in terms of concessions from Beijing.

US customs will impose “a small, additional” levy of 10 per cent on the imports, starting on September 1, he said.

“China agreed to buy agricultural product from the US in large quantities, but did not do so,” Trump wrote in a series of tweets.

“Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die!”

Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal. We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to… buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die! Trade talks are continuing, and…

Trump’s announcement breaks a ceasefire that had been in place since he met his Chinese counterpart, Xi Jinping, a month ago during the G20 summit in Osaka, Japan.

It also marks the biggest escalation in the 13-month trade war since the US leader announced in May, just ahead of bilateral talks in Washington, that 10 per cent tariffs on US$250 billion worth of goods would rise to 25 per cent.

Industry groups affected by the import tariffs weighed in quickly on Thursday, with the US Chamber of Commerce, National Retail Federation, Retail Industry Leaders Association (RILA) and the American Apparel and Footwear Association all condemning Trump’s move.

The action also rattled capital markets and oil prices. The S&P 500 stock index dived after the tariff announcement, erasing an earlier daily gain of more than 1 per cent and falling to a loss of the same magnitude, while oil prices fell by nearly 8 per cent.

The new tariff “is a direct hit on consumer products and family budgets, plain and simple”, RILA, which counts Apple and Nike as members, said in a statement.

The US tariff increases will hurt American buyers with higher prices on items such as clothing, toys and home goods, the Retail Industry Leaders Association said. Photo: SCMP Pictures

“Tariffs are taxes on American consumers. And if these tariffs happen, American consumers will bear the brunt of these tactics via higher prices on everyday items like clothing, toys, home goods and electronics,” the association said.

Myron Brilliant, the US Chamber of Commerce’s executive vice-president and head of international affairs, said raising tariffs by 10 per cent on an additional US$300 billion worth of imports from China “will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong US economy”.

Wendy Cutler, a former US trade negotiator, echoed that sentiment.

US-China trade talks “aren’t getting any easier”, Cutler, who is now vice-president at the Asia Society Policy Institute, said in a tweet.

“Don’t expect … China to sit by, the [US]$300b tariffs plus China’s counter-retaliation will take a heavy toll on consumers, workers, businesses and farmers in the US.”

However, speaking to reporters at the White House after his announcement, Trump asserted that China was bearing the brunt of the trade war.

China is “paying for these tariffs. We’re not”, Trump said, adding: “Until such time as there is a deal, we’ll be taxing them”.