The U.S.-China trade war escalated again for the second time Friday after President Donald Trump declared the U.S. would increase rates for existing tariffs on $250 billion of Chinese goods as well as boost tariffs on $300 billion worth of imports that haven’t yet been levied.
The announcement comes on the heels of China declaring it will increase tariffs on $75 billion worth of U.S. goods, including farm commodities.
Trump tweeted that on Oct. 1, the U.S. will enact a 5% increase to the tariff rate on $250 billion worth of Chinese goods that is currently set at 25%. Also, the rate on new tariffs slated to go into effect on Sept. 1 or Dec. 15 for the additional $300 billion of products will be pushed up to 15% instead of the planned 10%.
Trump is effectively announcing a U.S. retaliation to a Chinese retaliation that was announced Friday as a response to a U.S. plan to put new taxes on $300 billion worth of Chinese goods. Some of those new U.S. import taxes will be levied Sept. 1 and some will be enacted Dec. 15.
The Chinese retaliation (preceding the latest U.S. retaliation) will raise tariff rates on a wide swath of U.S. farm goods, including soybeans, oats, barley, peanuts, potatoes, apples, oranges, lemons, limes, avocados, lettuce, broccoli, tomatoes, almonds, walnuts and many other crops grown across the country.
In a Twitter thread announcing the U.S. tariff escalation, Trump said the Chinese "should not have" announced this morning's tariffs, calling them "politically motivated."
Trump’s latest escalation is already getting some blowback. Senate Finance Committee Chairman Chuck Grassley, in a prepared statement, lauded Trump’s fight against China’s unfair trading practices and intellectual property theft, but also criticized the president’s dependence on tariffs.
“China’s economy is hurting as a result (of the U.S. tariffs), but so too are U.S. consumers and many sectors in the American economy,” Grassley said. “Iowa farmers have been particularly hard hit and are at risk of permanently losing an export market. The only way to end this trade war is for China to come to the table and negotiate seriously on an enforceable deal that ends its bad behavior and unfair trade practices. In the meantime, tariffs cannot be the only negotiating tool. Tariffs are not a long-term solution.”
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