Donald Trump tweets to slap tariffs on all Chinese goods
The President of United States (U.S.) – Donald Trump has said that he will increase the tariff by more than double on Chinese goods worth U.S. $ 200 billion. The news came as a surprise early morning tweet by the US President wherein he slammed china and said that he would slap tariffs on almost all imported Chinese goods starting this friday.
The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!
— Donald J. Trump (@realDonaldTrump) May 6, 2019
A Chinese delegation is getting ready to reach Washington for negotiations. However, it is not yet known if Beijing’s top trade negotiator, Vice-Premier – Liu He will be part of that delegation which will resume talks on Wednesday, May 8, 2019.
Reacting to China’s delayed response on trade talks, Trump tweeted, “For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billion Dollars.”
He further added, “The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!”
The Deputy Director of the Foreign Ministry Information Department of the People’s Republic of China – Geng Shuang said, “We are currently working on understanding the situation.”
Post Trump’s tweet, the U.S. main stock indexes fell sharply before paring their losses. Dow Jones went down 0.8%, Nasdaq 1% and the S&P 500 went down 0.9%. In China, Hong Kong’s Hang Seng index closed 2.9% lower, while the Shanghai Composite tumbled 5.6%.
Last week, the U.S. Treasury Secretary – Steven Mnuchin has said that the talks with China have been productive. However, Trump has always accused China for indulging into unfair trade practices, particularly with regards to giving access to its huge market, intellectual property and technology transfers. He has said that a big trade deficit with China shows the United States is being ripped off.
The business community in the U.S. has supported Trump’s views and opined that the move would rein in intellectual property theft and open up China’s massive market. Trump’s announcement will impact the duties on more than 5,000 products made by Chinese producers, ranging from chemicals to textiles and consumer goods.
For the records, U.S. had first imposed a tariff of 10% on Chinese goods in 2018. This was supposed to rise in January 2019. However, Trump and the Chinese President – Xi Jinping announced a truce in December 2018, committing themselves of not increasing the tariffs further.
Besides, the International Monetary Fund (IMF) has said that trade war will weaken the global economy. Renewal of tariffs would turn out to be a drag on the global trade. According to the Swiss Bank UBS – such retaliatory measures might decline the US equities to a further 10% – 15% as a consequence.
