US, China Locked In ‘Largest Trade War In Economic History’ As Tens Of Billions Of Dollars In Tariffs Drop
The U.S. and China have pulled out the big guns in a trade war that has been escalating for months, with each side punishing the other with tariffs on tens of billions of dollars in annual exports.
The U.S. imposed a 25 percent tariff on Chinese goods worth an estimated $34 billion at midnight Friday. China immediately retaliated with reciprocal trade penalties, upping the ante in the trade war that has long been expected. (RELATED: The US-China Trade War Is About To Escalate In A Big Way)
“After the U.S. activated its tariff measures against China, China’s measures against the U.S. took effect immediately,” Ministry of Foreign Affairs spokesman Lu Kang said Friday, as the Ministry of Commerce accused Washington of starting the “largest trade war in economic history.”
In response, there has been market confusion and chaos at customs ports processing foreign goods.
The trade war has been months in the making.
The Trump administration placed a steep tax on solar panels and washing machines earlier this year, triggering a trade spat with China, the world’s largest producer of solar modules. At the beginning of March, President Donald Trump decided to put tariffs of 25 and 10 percent on foreign-made steel and aluminum, which caused the trade dispute to escalate. China retaliated with tariffs on U.S. exports worth roughly $3 billion.
Toward the end of March, the Trump administration announced plans to impose tariffs on Chinese products worth an estimated $50 billion as punishment for China’s egregious theft of American intellectual property. The latest tariffs are part of that larger package of trade penalties, and there is the possibility that the president may move to place tough taxes on Chinese products worth several hundred billion dollars in addition to existing tariffs. (RELATED: Trump Threatens To Hit China With Tariffs On $200 Billion Worth Of Goods)
The U.S. remains confident entering the trade war, with the White House asserting that “China has a lot more to lose.” (RELATED: White House: ‘China Has A Lot More To Lose’ In A Trade War)
China has warned it does not intend to lose this fight. “China is forced to strike back to safeguard core national interests and the interests of its people,” the Ministry of Commerce said Friday.
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