US President Donald Trump vowed to impose a 10% tariff on $300 billion of Chinese imports from September 1, “I think President Xi... wants to make a deal, but frankly, he's not going fast enough,” Trump said. The move wreaked havoc in the stock market with Asian stocks taking a beating, as soon as the announcement was made.
Oil prices plummeted 7%, with Brent crude registering the biggest daily percentage drop since February 2016.
Retail associations predicted a spike in consumer prices. Since the trade war began in 2018, Beijing has refrained from slapping tariffs on US Crude oil and big aircraft, after cumulatively imposing additional retaliatory tariffs of up to 25 per cent on about $110 billion of US goods. Analysts expect China to deliver apt retaliations, one step at a time.
American business groups in China are concerned about increased regulatory scrutiny, delays in licenses and approvals, and discrimination against US companies in government procurement tenders.
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Trump's move will hit US consumers harder than Chinese manufacturers as 42 per cent apparel and 69 per cent footwear purchased in the US is produced in China.
Trump has failed to make good on a goodwill gesture he said he would make after the G20 meeting to relax restrictions on sales to Chinese telecommunications giant Huawei.
Result of misbehaviour by China
Pompeo on Friday said "decades of bad behaviour" from China has led to the state the trade war is currently in. President Trump said that China failed to keep up promises to buy more US farm goods.
Pompeo spoke from the Thai capital Bangkok, where he is attending a wider meeting of Southeast Asian nations with world powers.
President Trump said to fix the situation requires determination, and that's what you saw this morning, Pompeo said. "There have been negative implications from decades of bad behaviour from China," he added. Pompeo also said the United States remains "fully committed" to restarting talks with North Korea on denuclearisation.
Senior Chinese diplomat Wang Yi in the meantime said that threatening with more tariffs is not a constructive way to resolve the trade dispute.