President increases tariffs on Chinese products

Stocks plummet 623 points amid rising tensions

Associated Press

WASHINGTON

Escalating his trade war with China, President Donald Trump bumped up his tariffs on Chinese imports Friday, lashing back after Beijing raised taxes on U.S. products.

In a tweet, Trump said he would be raising planned tariffs on $300 billion in Chinese goods from 10 percent to 15 percent. The Office of the U.S. Trade Representative also said existing tariffs on another $250 billion in Chinese imports would go from 25 percent to 30 percent Oct. 1 after receiving feedback from the public.

The rising tensions between the world’s two biggest economies sent the stock market into a tailspin. The Dow Jones Industrial Average closed down 623 points – before Trump announced the new tariffs.

The move came hours after Beijing said it would hike tariffs on $75 billion in U.S. imports, escalating a conflict over trade and technology that threatens to tip a fragile global economy into recession.

Though expected, the president appeared caught off-guard by China’s action Friday, and was angry when he gathered with his trade team in the Oval Office before departing for France, according to two people familiar with the meeting who spoke to AP on condition of anonymity because they were not authorized to disclose closed-door conversations.

Officials, including U.S. Trade Representative Robert Lighthizer and adviser Peter Navarro discussed potential retaliatory options. Treasury Secretary Steve Mnuchin, returning from vacation, joined by phone.

Earlier Friday, the president said he “hereby ordered” U.S. companies to seek alternatives to doing business in China.

Tariffs on $300 billion in Chinese imports are scheduled to go into effect in two stages – on Sept. 1 and Dec. 15. Originally scheduled to be 10 percent, they will now be 15 percent.

Trump’s latest escalation will impose a burden on many American households. Even before he announced an increase Friday, J.P. Morgan had estimated that Trump’s tariffs would cost the average household roughly $1,000 a year if he proceeded with his threats.

Businesses large and small joined in a chorus of opposition to the intensifying hostilities.

“It’s impossible for businesses to plan for the future in this type of environment,” said David French, senior vice president of government relations at the National Retail Federation.