Announced on U.S. President Donald Trump’s twitter August 1st, the U.S. will start imposing additional tariffs of 10% on USD 300 Billion more Chinese goods. The new tariffs will be effective September 1st, just one month after its proclamation.
The announcement comes as a surprise to many people as Trump has said he’s had very good conversations with President Xi of China regarding trade between the two countries. The tariffs on USD 300 Billion Chinese goods have been mentioned by Trump months before when he had imposed tariffs on USD 200 Billion worth of Chinese goods, but hasn’t come into fruition since negotiations between the trade teams are still taking place. The initial tariffs were 10% on the USD 200 Billion worth of goods, but were hiked to 25% in May.
Trump has said “The 10% is for a short-term period, and then I can always do much more or less depending on what happens with respect to a deal” to reporters on the White House South Lawn. “We are starting at 10% and it can be lifted to well beyond 25%.”
Following the announcement, many stocks fell sharply as the tariffs could hurt companies that operate overseas in China.
In response to the tariffs, China has said it would not be blackmailed and warned the U.S. of retaliation. Hua Chunying, Director of the Foreign Ministry for China, has said Beijing would not give an inch under pressure from Washington and “If America does pass these tariffs then China will have to take the necessary countermeasures to protect the country’s core and fundamental interest.”
The trade war between the two countries has been ongoing for more than a year, and there seems to be no end in sight between two of the largest economies in the world.