Trade between the world’s two largest economies could soon come to a standstill as the U.S. and China dig in on trade war.
President Donald Trump hit China with 145% tariffs on imports from the globe’s second-largest economy. China hit back with 125% tariffs, but said there’s no point in going higher.
“Even if the U.S. continues to impose higher tariffs, it will no longer make economic sense and will become a joke in the history of world economy,” China’s Finance Ministry said a statement. “At the current tariff level, there is no market acceptance for U.S. goods exported to China. If the U.S. continues to play the tariff numbers game, China will ignore it. However, if the U.S insists on continuing to substantially infringe on China’s interests, China will resolutely counterattack and fight to the end.”
China’s Commerce Ministry called the U.S. approach “unilateral bullying.”
Trump remained optimistic Thursday about reaching a deal with Xi Jinping, president of the People’s Republic of China.
“We’ll see what happens with China. They’ve really taken advantage of our country for a long period of time. They’ve ripped us off,” Trump said. “We’re resetting the table. We’ll end up working out something that’s very good for both countries.”
On the campaign trail and since inauguration, Trump has made unconventional promises about his tariffs. He has said tariffs will make the U.S. “rich as hell,” bring back manufacturing jobs lost to lower-wage countries in decades past and shift the tax burden away from U.S. families. He’s also promised to help working Americans with his tariffs.
A tariff is a tax on imported goods. The importer pays the tax and can either absorb the loss or pass the tax on to consumers in the form of higher prices.
In his “Liberation Day” speech, Trump said foreign nations for decades have stolen American jobs, factories and industries. He said the tariffs would bring in new jobs, factories and industries and return the U.S. to a manufacturing superpower.
“Our country and its taxpayers have been ripped off for more than 50 years,” Trump said. “But it is not going to happen anymore.”
Trump’s executive order also gives him authority to increase the tariffs “if trading partners retaliate” or “decrease the tariffs if trading partners take significant steps to remedy non-reciprocal trade arrangements and align with the United States on economic and national security matters,” according to the White House.
