24 Aug 2019

Trump hits back at China, escalating trade war

9:32 pm on 24 August 2019

President Donald Trump has hit back at China by announcing new higher tariffs on imports - escalating a mounting trade war between the two nations.

US President Donald Trump speaks during a campaign rally in New Hampshire on 15 August.

Photo: AFP

In a series of tweets on Friday, Mr Trump announced an additional tariff increase of 5 percent on imports from China.

The move came hours after the president hit out at Chinese plans to hit $75 billion ($NZ117b) of US goods with duties.

Mr Trump described their action as "politically motivated" and has accused them of "taking advantage" of the US.

"Sadly, past administrations have allowed China to get so far ahead of fair and balanced trade that it has become a great burden to the American taxpayer," Mr Trump tweeted. "As president, I can no longer allow this to happen!"

Mr Trump has also said he had "hereby ordered" American companies to look for alternatives to China and suggested they make products in the US instead.

Earlier, China unveiled plans to increase duties between 5 percent and 10 percent on more than 5000 US products including agricultural goods, aircraft and crude oil.

It will also re-impose a suspended 25 percent duty on US car imports.

The new tariffs, set to affect about $75b ($NZ117b) of US goods, will be imposed in two stages on 1 September and 15 December.

What has Trump announced?

In a series of Friday evening tweets, Mr Trump said the US would raise its tariffs on $250b ($NZ390.4) of Chinese imports from 25 percent to 30 percent starting on 1 October.

He also said planned tariffs on $300b ($NZ468.4) of other Chinese goods will now be 15 percent instead of 10 percent.

President Trump unveiled the 10 percent tariff plan on 1 August - blaming China for not following through on promises to buy more American agricultural products.

Those tariffs, imposed on items like electronics and clothing, were expected to be introduced at the beginning of September but some have been delayed until mid-December to avoid hitting US Christmas shoppers.

The latest developments in the trade war have sent global financial markets tumbling.

The Dow Jones Industrial Average lost more than 620 points, or 2.4 percent, on Friday while London's FTSE 100 and the German DAX also turned negative.

On Friday Mr Trump turned his fire against the head of the US central bank, Jerome Powell, after he spoke out about the economic risks of a trade war.

In a tweet, the president went as far to question whether Federal Reserve chairman was a greater "enemy" than China's leader Xi Jinping.