The communist government of China did not back down from massive tariffs issued by President Donald Trump and instead slapped the U.S. with a retaliatory tariff of 134%.
Trump hiked up his tariff against China to 145% in total at the same time that he announced a 90-day pause in the tariffs on other countries. The volatility in the global trade war led to the same in the stock market, which recovered some of its massive losses by the end of trade on Friday.
‘Given the current level of tariffs, US goods exported to China are no longer market-viable.’
The president had fulfilled his campaign promise to impose new tariffs in order to raise federal revenue as well as encourage the creation of new manufacturing jobs in the U.S. After a week of losses in the stock market, however, Trump relented and called for a tariff pause, with China as an exception.
The president issued an ultimatum to China to drop its retaliatory tariff or face a hike to more than a 100% tariff, which would basically end trade between the two nations.
“CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!” Trump wrote on social media.
China refused to back down, and the president made good on his threat.
A spokesperson for the Chinese Ministry of Commerce said that Trump’s trade negotiation had become a “numbers game which has no practical significance on economics” in a news conference on Friday.
“It’s become a joke,” the spokesperson added.
But Chinese officials also said they were through raising tariffs no matter what the U.S. did.
“If the U.S. continues to increase tariffs on Chinese exports, China will not respond,” read a statement from China’s Ministry of Finance. “Given the current level of tariffs, U.S. goods exported to China are no longer market-viable.”
Some members of Congress have suggested legislation to retrieve the tariff power from the executive, but not enough have shown support to overcome an almost certain veto from the president. The Constitution grants the power of tariffs to Congress, but the legislature incrementally transferred that power beginning in World War I and through the Great Depression.
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