Trump announced the new tariff on Twitter, calling it “small” and expressing hope that “the future between our two countries [US and China] will be a very bright one.”
The US president said that the move was necessary because Beijing decided to renegotiate the trade deal already struck with Washington three months ago, failed to make good on its promise to buy “large quantities” of American agricultural products, and continues to send the dangerous opioid fentanyl to the US, so “many Americans continue to die.”
The new tariff is on top of the $250 billion in Chinese imports already taxed at 25 percent, Trump clarified.
Stock markets were alarmed at the announcement, with the Dow Jones Industrial Average (DJIA) dropping 130 points within minutes, wiping out all of the day’s gains and venturing into negative territory.
On Wednesday, Trump warned China that it will get “a much tougher” trade deal if it keeps stalling the talks until the 2020 presidential election in the US.
He also blasted Beijing for not buying the US agricultural exports that it promised to purchase. China rejected the claims, with the state-owned Xinhua news agency reporting that millions of tons of US soybeans have been delivered to China since July 19, with local businessmen also looking to purchase cotton, pork and sorghum.
The trade war between the world’s two largest economies broke out last year, when Trump slapped 25 percent tariffs on $50 billion worth of Chinese products. Beijing retaliated in kind, with both sides exchanging several rounds of tit-for-tat levies.
In June, the US raised tariffs on $250 billion worth of Chinese goods to 25 percent, with China retaliating by targeting 5,000 US-made products worth $60 billion.
Washington and Beijing agreed to put tariff hikes on hold after Trump’s talks with Chinese leader Xi Jinping at the G20 summit in June, but that ‘truce’ appears to have now come to an end.