Trump announces new tariff hike on Chinese goods, escalating trade tensions
US president Donald Trump announced on Sunday that if a trade deal was not reached he would hike US tariffs on $200 billion worth of Chinese goods
Trump put extra pressure on China to reach a trade deal saying he would hike US tariffs this week and target hundreds of billions more soon.
The move escalated trade tensions between the US and China, taking many by surprise after Trump cited progress in talks on Friday.
'The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!' Trump said in a tweet.
It comes after US trade representative Robert Lighthizer updated Trump with details that China was pulling back from previous commitments, which prompted Trump’s tweet.
Shortly after Trump’s announcement financial markets reacted negatively. S&P 500 e-minis fell 1.6%, and the Dow futures were down 420 points.
Wall Street stock index futures fell sharply, with the Nasdaq 100 e-minis were down 119 points, or 1.51%, and Dow e-minis were down 358 points, or 1.35%.
AUD/USD fell 0.8% on Monday morning, recovering to $0.6998
Increase in current tariffs
Trump also said he would target a further $325 billion of Chinese goods with 25% tariffs "shortly,"
Analysts say Trump's move could be a negotiating tactic ahead of a new round of talks this week. Trump said tariffs on $200 billion of Chinese goods would increase to 25% on Friday from 10%, despite his decision in February to keep them at the 10% rate.
'The Tariffs paid to the USA have had little impact on product cost, mostly borne by China,’ he tweeted.
Chinese officials will meet with US officials in Washington on Wednesday after the Beijing meeting last week.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.