US President Donald Trump has directed his administration officials to consider imposing $100 billion in additional tariffs on China, stoking fears of a full-blown trade war between the two powers.
“In light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs,” Trump said in a statement on Thursday, referring to the US Trade Representative.
“I have also instructed the Secretary of Agriculture, with the support of other members of my Cabinet, to use his broad authority to implement a plan to protect our farmers and agricultural interests,” he added.
US stock futures dropped following Trump’s annoucemnt. S&P 500 Index futures slid as much as 1.6 percent, after the underlying gauge ended up 0.7 percent on Thursday.
On Tuesday, the Trump administration slapped a $50 billion tariff package on China, with up to 25 percent tariffs being imposed on imports of Chinese electronics, shoes, furniture and other goods.
China hit back on Wednesday, retaliating with a list of similar duties on key US imports including soybeans, planes, cars, beef and chemicals. The speed with which the trade struggle between Washington and Beijing led to a sharp selloff in global stock markets and commodities.
Trump denied that the US is going to start a trade war with China.
“We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the US,” Trump tweeted on Wednesday.
China’s Foreign Minister Wang Yi has warned that the United States will itself suffer from the protectionist policies that it has adopted in trade relations with China.
“Instead of targeting fairly traded US exports, China needs to stop its unfair trading practices which are harming US national security and distorting global markets,” White House spokeswoman Lindsay Walters said on Monday.
“China’s subsidization and continued overcapacity is the root cause of the steel crises,” she added.
Last month, Trump announced to impose tariffs of up to $60 billion on some Chinese imports.
Since Trump’s announcement of the tariffs, Beijing has several times warned that a trade war would benefit no one but has also said that China is ready to take on America if it goes ahead with the aggressive trade policies.