President Donald Trump took his boldest step to level the economic playing field with China, ordering sweeping tariffs on Chinese goods in a move that could escalate already tense trade relations between the world's two biggest economies.
The president instructed US trade representative Robert Lighthizer to levy tariffs on at least $50 billion in Chinese imports. Mr Trump signed an executive memo issuing the instructions on Thursday at the White House. Within 15 days, Mr Lightizer will come up with a proposed list of products that will face higher tariffs.
“This has been long in the making,” Mr Trump said, adding that the tariffs could affect as much as $60 billion in goods. “We have a tremendous intellectual property theft situation going on” with China affecting hundreds of billions of dollars in trade each year, he said.
As he signed the tariffs order, Mr Trump told reporters, “This is the first of many.”
Mr Trump also directed Treasury Secretary Steven Mnuchin to propose new investment restrictions on Chinese companies within 60 days to safeguard technologies the US views as strategic, said senior White House economic adviser Everett Eissenstat.
Policy makers across the world are warning of a brewing trade war that could undermine the broadest global recovery in years. US stocks fell sharply early Thursday amid worries that the US action could provoke a stern response from China, with the SandP 500 down 1.1 per cent at one point. Meanwhile, business groups representing companies ranging from Walmart to Amazon. com are warning US tariffs could raise prices for consumers and sideswipe stock prices.
Even central banks, which normally stay above the fray of trade spats, are weighing in. "A number of participants reported about their conversations with business leaders around the country and reported that trade policy has become a concern," Federal Reserve chairman Jerome Powell said this week, while cautioning that trade issues haven't changed the Fed's outlook. The Bank of England warned on Thursday that increased protectionism could have a "significant negative impact" on global growth.
- Bloomberg
