In commercial activity, President Donald Trump announced that he would raise taxes on both taxable goods and China’s upcoming taxable products.
In a series of tweets posted on the afternoon of August 23, Mr. Trump said that the 25% tax with 250 billion USD of current Chinese goods will increase to 30% since October 1. The expected 10% tax rate with another 300 billion USD of Chinese goods will increase to 15%.
The move comes only hours after China’s State Council announced it would raise a 5-10% tax on US $ 75 billion of US goods in retaliation for Washington’s previous tax increase.
“Sadly, past governments have allowed China to surpass in Fair Trade and Equilibrium to the extent that it has become a burden for US taxpayers,” Trump wrote on Twitter. “As President, I cannot let this happen! In the spirit of Fair Trade, we must Balance this very unfair Trade Relationship.”
“China should not impose a new tax on 75 US dollars of American goods,” he wrote.
Chinese taxes impose a total of 1,717 US goods including soybeans, crude oil, steel plates and chemicals that will take effect on September 1, with about 3,361 other items including wood, automobiles and textiles. effective from December 15. These milestones correspond to the new tax round from the US.
China has imposed a tax of about 110 billion USD on goods from the United States, equivalent to about 70% of the whole product, with about 40 billion USD being unaffected. This means that the new tax increase order from Beijing is a doubling of some previously taxable goods.
“We don’t need China, and it would be much better without them,” Trump wrote. “Great American companies are ordered to immediately find another alternative to China, including bringing the company TO COUNTRY and producing goods in the US”.
Tax orders that are only a few hours apart between the two countries have shocked investors because of fears of escalating further from the US-China trade war.
The Dow Jones industrial index fell 623 points to 25,628 points, or 2.37%, while companies and trade associations urged the two countries to negotiate again. The Nasdaq technology index also fell 3%.
Behind the anger of Mr. Trump is the fact that is becoming more and more obvious to Washington. The commercial war that the US president once said “easy to win” is becoming more and more difficult and harmful than his previous calculation.