Trump’s latest move to raise the tariff rate on an additional $200 billion worth of Chinese goods has made China, in turn, retaliate by threatening to impose tariffs on $60 billion worth of US goods. Already the two countries have imposed about $34 billion worth of tariffs on each other.
According to China’s Ministry of Commerce, “the implementation date of the taxation measures will be subject to the actions of the US, and China reserves the right to continue to introduce other countermeasures.”
President Donald Trump’s recent threat to raise the proposed tariff rate is in part to make it harder for China “to continue their bad practices than it is to reform,” US Commerce Secretary Wilbur Ross said in a statement.
China exports far more products to the United States than the other way around, making it harder for China to hit back with raising tariffs on Chinese products. Currently, China listed 5,207 US products that it would target in an effort to “safeguard its own legitimate interests.” Some of the products that would be affected include meat, coffee, nuts, alcoholic drinks, minerals, chemicals, leather products, wood products, machinery, furniture and auto parts.
The White House was hoping that the latest tariff threats would force the Chinese officials into negotiations but instead, it seems that Beijing has instead become more retaliatory. If this continues to happen both countries could have serious impacts that could hurt the economy.
We are already seeing companies being affected by the tariffs imposed on products. Coca-Cola recently announced that it would raise the cost of its carbonated drinks because of the recently enacted 10% tariff on imported aluminum.
Larry Kudlow, Trump’s top economic adviser has said, “The Chinese had better not underestimate the determination of President Trump to follow through and seek zero tariffs and non-tariffs barriers,” Kudlow said during an interview on Fox Business Network. The Chinese “are not in good economic shape.”