U.S. President Donald Trump, in a massive increase of pressure on Beijing, has instructed the appropriate U.S. authorities to begin the process of raising tariffs on all Chinese goods imported into the United States to 25%. The increase will add another $300 billion worth of trade to the current amount of goods that are taxed.
To announce the new measures, US Trade Representative Robert Lighthizer issued a Friday statement.
“Earlier today, at the direction of the President, the United States increased the level of tariffs from 10 percent to 25 percent on approximately $200 billion worth of Chinese imports. The President also ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion.”
With its massive trade surplus with the United States, China cannot respond in kind. However, they do have other ways of pressuring Washington, such as harassing American companies and even imprisoning executives, as they have done recently with Canadian personnel over the arrest and extradition of the senior Huawei executive in Vancouver.
Market reaction next week will be of keen interest.