The Dow Jones Industrial Average fell by more than 700 points shortly after 1 p.m. ET Monday, with the Nasdaq composite falling by about 3.5%. -China tariff battles have proved Pyrrhic for both sides, one thing is clear, despite what Trump wants to believe: American consumers and businesses are paying a big price for them.
The president has been using tariffs like a cudgel to force China to the negotiating table.
The Trump administration's previous decision to impose 10 percent tariffs on $200 billion of Chinese imports and 25 percent on another $50 billion worth was followed by Chinese countermeasures, with Beijing targeting $110 billion of Chinese imports. He accused China of "ripping off" America. Before last week, it appeared as if the United States and China may have been headed to a trade breakthrough. China has hit back with its own retaliatory tariffs. "You had a great deal, nearly completed, & you backed out!" Both countries still have an incentive to reach a deal. The tariff increases already in place have disrupted trade in such American products as soybeans and medical equipment and sent shockwaves through other Asian economies that supply Chinese factories.
He recounted telling the secretary and U.S. Trade Representative to respond by putting on the tariffs which would go into effect Friday. "China trade negotiations and concern that it's really deteriorating pretty significantly and that's impacting all areas of markets", said Kristina Hooper, chief global market strategist at Invesco in NY.
People close to the talks said finding an agreement is likely to prove increasingly hard with hardliners on both sides seeing the latest breakdown as evidence the other side can not be trusted. But nothing has been scheduled.
The president has repeatedly insisted that increased tariffs on Chinese goods don't hurt American consumers.
President Trump encouraged manufacturers hit by the tariffs to move manufacturing to the USA or to secondarily consider buying from a country not hit by the same level of tariffs. "Losing a valuable market, losing stable pricing, losing an opportunity to support our families and our communities".
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President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing, China, Nov. 9, 2017. The administration past year handed farmers aid worth $11 billion to offset losses from trade conflicts. "I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win, " the president said.
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The president's allies in Congress scrambled to limit the damage to farm country.
"But China is not afraid, nor are the Chinese people", he said, adding that "China needs a cooperative agreement with equality and dignity".
"I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the U.S. for $500 Billion a year", he tweeted. "You can't move these goalposts like they're moving them and expect to be respected".
The higher Chinese tariffs don't kick in until June 1.
The US and China have been involved in an all-out economic battle since early a year ago when Trump accused Beijing of stealing trade secrets and forcing foreign companies to give up technology in order to gain access to Chinese markets. While profitable companies might simply absorb that additional cost, they could also pass it on to others.