President Donald Trump directed the US Trade Representative's office to draw up a list of $200 billion worth of Chinese goods to subject to an additional 10% tariff.
Trump said that the new tariff would go into effect if the Chinese government did not lower recently announced tariffs on US goods and failed to address the theft of US intellectual property by Chinese companies.
The latest round of tariffs would almost definitely put the US into all-out trade war against China.
President Donald Trump threatened to escalate the trade fight with China into an all-out trade war on Monday, promising to impose massive tariffs on Chinese goods unless Beijing reverses course on its own trade actions.
Trump directed the US Trade Representative's office to begin drawing up a list of $200 billion worth of Chinese goods to hit with a 10% tariff, dwarfing the size of previous trade actions against China.
"Therefore, today, I directed the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent," Trump said. "After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced."
Monday's announcement comes just three days after Trump officially announced that tariffs on $50 billion worth of Chinese goods would be subject to a new 25% tariff starting July 6. The tariffs were the result of an investigation by Commerce Department into the theft of US intellectual property by Chinese companies.
Following Trump's announcement, China rolled out retaliatory tariffs on $50 billion worth of US goods and promised to stand firm against the US's actions.
The statement from Trump on Monday said that China's response showed that Beijing had no plans to address the underlying IP theft and required escalation by the US.
"This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods. This is unacceptable," Trump said. "Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States."
In addition to the second set of tariffs, Trump also threatened to hit China with a third wave — an additional 10% on another $200 billion worth of Chinese goods — if the Beijing rolled out their own wave of tariffs.
Following the statement from Trump, US stock futures dove into negative territory. As of 8:25 pm ET, S&P 500 futures were down just over 0.5% and Nasdaq futures were off just over 0.65%.
The threats appear to show a near collapse of the talks designed to avoid a trade war. A delegation of Trump officials initially reached a preliminary deal with their Chinese counterparts on a preliminary trade deal that would have postponed the US tariffs in exchange for Chinese purchases of American goods.
But, Trump's decision to move forward with the tariffs caused the deal to collapse and the trade battle to escalate once again.
Here's a rundown of the major events in the US-China trade battle:
March 1: Trump announces tariffs on all imports of steel and aluminum, including metals from China.
March 22:Trump announces the US will soon hit $50 billion worth of Chinese goods with a 25% tariff. China announces tariffs in retaliation for the steel and aluminum tariffs, promises response to new announcement.
April 3: The USTR announces the full list of Chinese goods that could be subject to the tariff, there is a mandatory 60 day comment period for industries to ask for exemptions from the tariffs.
April 4:China rolls out a list of more than 100 US goods with roughly $50 billion that will be subject to retaliatory tariffs.
May 19: After a visit from Chinese officials, the two countries announce the outline of a deal to avoid the tariffs.
May 29: The White House announces that the tariffs on $50 billion of Chinese goods will move forward, with the final list of goods released June 15. The move appears to wreck the nascent trade deal.
June 15: Trump rolls out the final list of goods subject to new tariffs. Chinese imports worth $34 billion will be subject to the new 25% tariff as og July 6, with another $16 worth of imports subject to the tariff at a later date. China retaliates with an equivalent set of tariffs.