fter China announced that it would retaliate in kind to the US placing tariffs on $50 billion in Chinese goods, Donald Trump has decided to quadruple-down, threatening to slap tariffs on an additional $200 billion in Chinese imports, a move that could only result in an all-out trade war between the world’s two largest economies.
“China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology,” Trump writes in an official statement published earlier this morning. “Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong.”
Trump adds that now further action must be taken in order to “encourage China to change its unfair practices,” announcing that he has directed the US Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent.
These tariffs will go into effect if China refuses to change its ways or insists on going forward with its retaliatory tariffs, says Trump.
“If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200 billion of goods,” he threatens.
Breaking: Trump announces he plans to retaliate against China's retaliation against his $50 billion in tariffs, asking his officials to identify another $200 billion worth of goods to hit with tariffs. pic.twitter.com/oqbY5XTQcS
— Daniel Dale (@ddale8) June 18, 2018
These threats echo back to a few months ago when Trump first threatened tariffs on $50 billion in Chinese goods. China quickly responded to that threat by vowing that it would meet such a measure with equal tariffs of its own, causing Trump to instruct the US Trade Representative to consider slapping an additional $100 billion in tariffs on China.
After that, things calmed down quite a bit with the two sides appearing to agree to the framework of a deal that would reduce the massive US trade deficit with China. On May 20th, Mnuchin even said that the two sides were “putting the trade war on hold.”
However, less than two weeks later, the White House suddenly announced that plans for the $50 billion tariffs weremoving ahead, marking June 15th as the date for when the finalized list of imports would be released, adding that the tariffs would go into effect “shortly thereafter.”
And indeed, on that date, the White House confirmed that it planned to go ahead with the 25 percent levies, prompting China to announce that would it impose 25 percent tariffs on 659 US products, including soybeans, seafood, and automobiles.
“China does not want the trade war, but facing a capricious Washington, China has no choice but to fight back vigorously in defense of its national interests, the trend of globalization and the world’s multilateral trading system,” said China’s official Xinhua news agency afterward.
However, if this blossoming trade war does continue to escalate, China will be hard-pressed to find ways to retaliate in kind. According to US government data, the US-China trade deficit in goods was $375,576 billion in 2017 with China only importing $129,893 billion of American goods.