U.S. President Donald Trump just intensified the tariff war with greater China, saying that he would impose an additional 10% tariff on $300 billion Chinese imports.
The move is set to hit American consumers in a more direct way, compared to previous strategies in his trade wars so far.
The new taxes will be imposed beginning in September on a long list of Chinese goods including smartphones, laptops, as well as children’s clothing.
According to Trump, the tariffs could go over 25% on top of the 25% already placed on some $250 billion Chinese goods, meaning almost all of the imports from China will be subject to the new regulations.
Trump’s move marks the most significant escalation in the trade war so far.
Surprisingly, it also disregards a truce reached with the U.S. President’s meeting with Chines counterpart Xi Jinping at the sidelines of the G20 Summit.
As markets have been up ahead of the news, they tumbled with all three major U.S. equity indices ending down 1%, along with bond yields sinking.
Oil sunk almost 8%, performing the steepest one-day drop in over four years.
Stocks slipped during the market open on an early Asian Friday as U.S. futures dropped.
China’s yuan slumped offshore, while stocks similarly plunged 3% earlier.
According to Trump, China had not delivered to a promise it made during both leaders’ meeting in Osaka.
China agreed to buy more U.S. agricultural goods than it used to, as well as to stop illegal fentanyl exports.
No More Room for Negotiations
The U.S. President told reporters later on that he’s “not concerned at all” about negative feedback from markets.
“I think they want to try and make a deal with us, but I’m not sure,” Trump said on a Thursday evening.
“Until such time that there is a deal, we will be taxing the hell out of China.”
Additionally, some sources say that earlier this week, during the meetings with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Shanghai, Chinese officials have also kept silent on making new proposals.
That had left the way out of a deadlock in talks over the substance of a deal that the two sides reached in May unclear. Subsequently, it prompted the administration to increase more pressure on Beijing at a White House meeting on Thursday.
Trump added that there were no plans to flip the sides of the coin of its decisions made in Osaka to permit the inflow of sales by U.S. suppliers of non-sensitive products to Chinese tech giant Huawei.
In a series of tweets, he announced the additional tariffs, leaving no door open for compromise.
“We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal and feel that the future between our two countries will be a very bright one!” he said.
Both superpower countries said after the trade talks conducted this week, their negotiators would meet again in Washington in early September.
Officials and analysts commented that they still plan for those negotiations to happen.
