China Sets New Tariffs on U.S. Goods; Trump Urges U.S. Companies to Move Production Home
China plans to impose new tariffs on $75 billion worth of U.S goods at the same time that new tariffs are set to kick off on its imports to the United States.
Tensions escalated in the U.S.-China trade war Friday after Beijing vowed to impose new tariffs on about $75 billion worth of U.S goods.
China's Finance Ministry announced the country will launch tariffs of 5 to 10 percent on U.S. imports on Sep. 1. The ministry also said it plans on resuming tariffs on U.S. imports of automobile and automobile parts, to take effect on Dec. 15, at either 5 or 25 percent.
U.S. President Donald Trump earlier threatened to impose an additional 10 percent tariff on $300 billion Chinese imports, set to take effect on Sep. 1. The retaliation from China came despite Trump's recent announcement that Washington would delay tariffs on consumer goods like smartphones, toys and video game consoles until Dec. 15.
Trump responded on Friday by urging U.S companies to leave China and start establishing their products in the U.S.
"We don't need China and, frankly, would be far better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP," Trump tweeted.
"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA."
It's unclear what legal authority Trump would be able to use to compel U.S. companies to close operations in China or stop sourcing products from the country.
He also ordered carriers such as Fed Ex, Amazon, UPS, and the U.S. Postal Office to "search for and refuse" all deliveries of Fentanyl from China or anywhere else. Trump also said the synthetic opioid kills 100,000 Americans per year.
Trump has also attacked the Federal Reserve to lower interest rates to help him in his battle with China. Though markets are anticipating the Federal Reserve will lower rates soon, according to NBC News, it didn't stop Trump from criticism, specifically targeting chairman Jerome Powell.
Separately, the stocks of Chinese tech giants, including JD.com Inc. (Nasdaq: JD) and Alibaba Group Holding Ltd. (NYSE: BABA) tumbled on the increased tension between the world's two largest economies on Friday. JD closed down more than 2 percent, at $28.77 per share, while Alibaba's stock dropped 4 percent, to $164.54 per ADS.
Earlier this month, China dropped the yuan below $7 for the first time since 2008 in response to the warning of new tariffs, in what Trump called "currency manipulation."
The two sides are still planning a new round of in-person talks in September.
(Reuters contributed to this article)