Trump orders US companies to quit China in trade war
US President Donald Trump has ordered American companies to exit China after Beijing unveiled retaliatory tariffs on $75bn (€67.3bn) in US goods, throwing a new twist into the bitter trade war between the world's two largest economies.
Mr Trump said on Twitter he will issue a response to China's latest tariff plan.
"We don't need China and, frankly, would be far better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP," Mr Trump tweeted.
"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA."
It's unclear what legal authority Mr Trump would be able to use to compel US companies to close operations in China or stop sourcing products from the country.
He said he also was ordering shippers including FedEx, Amazon.com Inc, UPS and the US Postal Services to search out and refuse all deliveries of the opioid fentanyl to the United States.
China had said it would impose retaliatory tariffs, targeting crude oil for the first time and renewing punitive duties on American-made cars.
The latest salvo was in response to Mr Trump's plans to impose 10pc tariffs on a final $300bn (€269bn) list of Chinese-made consumer goods on September 1 and December 15, including mobile phones, toys, laptop computers and clothing.
China's Commerce Ministry said that on those same dates it will impose additional tariffs of 5pc or 10pc on a total of 5,078 products originating from the United States, including agricultural products such as soybeans, beef and pork, as well as small aircraft.
Beijing is also reimposing tariffs on cars and parts that it suspended last December as US-China trade talks accelerated.
"China's decision to implement additional tariffs was forced by the US's unilateralism and protectionism," the ministry said in a statement.
US stocks fell sharply over fears the escalation could tip the economy into recession. The tech-heavy Nasdaq Composite was down 2.2pc, the S&P 500 index fell 1.8pc and the Dow Jones Industrial Average shed 1.7pc. US Treasury yields also fell as investors sought safe-haven assets.
US crude oil futures were down more than 3pc.
White House trade adviser Peter Navarro told Fox Business Network that US-China trade talks would nevertheless continue in September and dismissed the Chinese tariff threat as small in terms of the US economy.
Neither side so far appears to be ready to make a significant compromise needed to end the nearly 14-month trade war.
The protracted dispute has stoked fears about a global recession, shaking investor confidence and prompting central banks around the world to ease policy.
In an interview on CNBC, Federal Reserve Bank of Cleveland President Loretta Mester said she viewed the Chinese retaliatory tariffs as "just a continuation" of the aggravated trade policy uncertainty that has begun weighing on US business investment and sentiment.
The knock-on effects of the dispute was a key reason behind the Federal Reserve's move to cut interest rates last month for the first time in more than a decade.
"It is unclear as things stand whether the US-China trade negotiations will continue as planned in early September," said Agathe Demarais, global forecasting director at the Economist Intelligence Unit.
"All eyes will now turn to the Fed to see whether Jerome Powell, the Fed chairman, will react to these developments by accelerating rate cuts."
In a keynote speech at the Fed's annual central banking conference in Jackson Hole, Wyoming yesterday, Powell said the central bank would "act as appropriate" to keep the economy healthy but did not say how fast it might cut rates.
Among goods targeted by Beijing's were soybeans, which will be hit with an extra 5pc from September 1. China will also tag beef and pork from the United States with an extra 10pc tariff.
It is also reimposing an additional 25pc vehicles and 5pc on car parts that had been suspended at the beginning of the year. Carmakers such as Daimler and Tesla had adjusted their prices when the tariffs had been suspended.
Ford, a net exporter to China, said it encouraged the United States and China to find a near-term solution.
"It is essential for these two important economies to work together to advance balanced and fair trade," the company said. (Reuters)