Trump hiking U.S. tariffs on $550 billion in Chinese imports

President Donald Trump tweeted on Friday that his administration will boost tariffs on $550 billion in Chinese imports in retaliation for China’s decision on Friday to hike trade levies on $75 billion in U.S. products. The move deepens a trade war that many fear could tip the U.S. and global economies into recession.

The president said U.S. tariffs on $250 billion of Chinese imports will increase from 25% to 30% on October 1. An additional $300 billion in Chinese goods will be taxed at 15%, instead of 10%, starting on September 1. The stepped-up tariffs means the U.S. has hiked taxes on virtually all goods imported from China.

“China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!),” Mr. Trump tweeted on Friday afternoon.

The U.S. Trade Representative said in a statement that the tariffs on $300 billion will take effect at the higher rate in two phases as previously scheduled — one on September 1 and one on December 15.

The tariff hikes come after the president earlier on Friday had signaled he planned to respond to China’s own trade escalation. “I will be responding to China’s Tariffs this afternoon,” he wrote on Twitter. “This is a GREAT opportunity for the United States.”

Mr. Trump also said he was “ordering” U.S. businesses to “immediately start looking for an alternative to China,” including bringing their manufacturing back to the U.S. However, it wasn’t clear how he planned to force companies to do so, given that many rely on China for manufacturing that’s far more economical than is possible in the U.S.

Federal Reserve Chairman Jerome Powell and other policymakers warn that a prolonged trade war between the world’s two largest economies could sap global growth. Markets sagged on Friday after China’s move to raise tariffs and Mr. Trump’s vow to retaliate. The Dow closed down more than 600 points, or 2.3%, the Nasdaq plunged 3% and the broader S&P 500 lost 2.6%.

White House trade official Peter Navarro downplays consumer impact of Chinese tariffs

Businesses also expressed concern, with a trade group that represents large retailers criticizing the White House.

“It’s impossible for businesses to plan for the future in this type of environment,” David French, vice president of government relations for the National Retail Federation, said in a statement. “The administration’s approach clearly isn’t working, and the answer isn’t more taxes on American businesses and consumers. Where does this end?”

Rick Helfenbein, CEO of the American Apparel & Footwear Association, complained that the White House’s approach amounts to a “1930s trade strategy,” saying that it “will be a disaster for American consumers, American businesses and the American economy.”

More broadly, economists say that sharply higher tariffs on Chinese goods could raise prices for consumers on everything from phones and video consoles to apparel and shoes. Meanwhile, the latest escalation in trade tensions comes amid signs that the U.S. economy is slowing down, including declining corporate profits and a dip in job-creation.