Stocks drop after Trump 'orders' U.S. companies to leave China

China US Trade

Stocks drop after Trump 'orders' U.S. companies to leave China

The tariffs would be 25% or 5%, and would take effect on December 15th.

President Donald Trump said on Friday he was ordering us companies to look at ways to close their operations in China and make more of their products in the United States instead, sending USA markets down sharply in a new rhetorical strike at Beijing as trade tensions mounted.

United States companies could also sue their federal government in response to any order to shutter plants in China.

"My own recent conversations with the president over the last few days, I've noticed an increasing frustration with Xi Jinping", Pillsbury said.

Stocks fell sharply on Wall Street after Trump's comments: the Dow Jones Industrial Average sank more than 300 points after the president made the announcements on Twitter. China previously halted those auto tariffs back in April as part of a trade war truce.

"China was forced to take countermeasures".

On 1 August, President Trump unveiled a 10% tariff on $300bn of Chinese goods, blaming China for not following through on promises to buy more American agricultural products. The same was promised by the State Council Tariff Committee last week, but neither Gao nor the committee clarified what steps China will take. Trump had originally announced that his administration would impose 10% tariffs on $300 billion worth of Chinese imports on September 1, but later relented, and exempted smart phones and other consumer electronics until mid-December.

He says when China imposed tariffs a year ago, US vehicle exports to the country were cut in half.

Trump announced plans to raise tariffs September 1 on $300 billion of Chinese products after talks broke down in May.

"China is signaling yet again that it has no intention of backing off from the trade war, further reducing the likelihood of the US and China agreeing on any sort of trade deal in the coming months", said Cornell University economist Eswar Prasad, former head of the China division at the International Monetary Fund.

White House trade adviser Peter Navarro this morning downplayed the move as "well anticipated".

A report published earlier this summer out of Japan that looked at the winners and losers of the trade wars lists Vietnam, Chile, Malaysia and Argentina as the top countries that benefit the most out of Beijing and Washington fighting over tariffs.

China has largely turned to South America for soybeans since the trade war began previous year. Analyst Amanda DeBusk says the situation is "very serious", but China's tariff retaliation is not surprising. Carmakers such as Daimler and Tesla had adjusted their prices in China when the auto and auto parts tariffs had been suspended.

"It is essential for these two important economies to work together to advance balanced and fair trade", the company said.

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