Trump threatens all-out trade war with China, tariffs on $200 billion worth of goods

  • 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."

19 PHOTOS
Impact of trade tensions between US and China
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Impact of trade tensions between US and China

Head chef Liang Xin poses with a piece of beef imported from the U.S. in the kitchen at Wolfgang's, a high-end steak house in East Beijing's Sanlitun district, China, April 6, 2018. Liang said U.S. beef has always been limited in China, so he doesn't know how customers would react if the restaurant has to raise prices.

(REUTERS/Thomas Peter)

Liu Anqi rolls dough in flour made from imported grain at the baking studio she runs with friends, in Beijing, China, April 12, 2018. Liu has just opened a bakery in Beijing with her friend. She also teaches customers how to make cakes with a brand of flour that uses only wheat from the United States and Canada. "Flour is one of the most important ingredients in baking and its quality varies with different brands," Liu said, adding that finding a new brand would be time-consuming and higher taxes on this wheat would force her to raise cake prices and tuition fees, which could turn customers away. 

(REUTERS/Thomas Peter)

A detail of the Harley-Davidson brand name is photographed on the motorcycle of Guo Qingshan in his village outside Beijing, China, April 7, 2018. "I love the sound of the engine and the muscle of the motor. When I ride it, I feel free and proud," Guo said. However, Guo has his limits. If prices rise, Guo said he wouldn't contemplate buying another Harley. 

(REUTERS/Thomas Peter)

Fried vegetables are seen in the kitchen of the restaurant where chef Liu Ming works, in Beijing, China, April 11, 2018. Liu said the oil that his restaurant uses is produced with soybeans imported from the United States, and the business won't change the brand even if prices rise. "We use this oil because it gives the food a bright colour and does not leave a strange smell or taste," he said. "We don't know what will happen to our dishes if we change the oil."

(REUTERS/Thomas Peter)

Xie Guoqiang, who runs the Vin Place wine and liquors store, poses for a photograph inside the shop in Beijing, China, April 10, 2018. Xie said in an interview that the tariffs would have little impact on his business, as the shop mostly imports wine and liquors from France, Chile, Austria and Argentina.

(REUTERS/Damir Sagolj)

A bottle of Jack Daniel's Tennessee whiskey is seen on a shelf at the Vin Place wine and liquors store in Beijing, China April 10, 2018. Xie Guoqiang, who runs Vin Place, said in an interview that the tariffs would have little impact on his business, as the shop mostly imports wine and liquors from France, Chile, Austria and Argentina.

(REUTERS/Damir Sagolj)

Liu Ming, a chef at a Sichuan restaurant in Beijing, poses for a picture at the back door of the kitchen where he works in Beijing, China, April 11, 2018. Liu said the oil that his restaurant uses is produced with soybeans imported from the United States, and the business won't change the brand even if prices rise. "We use this oil because it gives the food a bright colour and does not leave a strange smell or taste," he said. "We don't know what will happen to our dishes if we change the oil." 

(REUTERS/Thomas Peter)

Liu Anqi uses flour made from imported grain at the baking studio she runs with friends, in Beijing, China, April 12, 2018. Liu has just opened a bakery in Beijing with her friend. She also teaches customers how to make cakes with a brand of flour that uses only wheat from the United States and Canada. "Flour is one of the most important ingredients in baking and its quality varies with different brands," Liu said, adding that finding a new brand would be time-consuming and higher taxes on this wheat would force her to raise cake prices and tuition fees, which could turn customers away. 

(REUTERS/Thomas Peter)

A bottle of oil is seen in the kitchen of the restaurant where chef Liu Ming works, in Beijing, China, April 11, 2018. Liu said the oil that his restaurant uses is produced with soybeans imported from the United States, and the business won't change the brand even if prices rise. "We use this oil because it gives the food a bright colour and does not leave a strange smell or taste," he said. "We don't know what will happen to our dishes if we change the oil." 

(REUTERS/Thomas Peter)

Zang Yi poses for a picture as her Tesla car is charging at a charging point in Beijing, China, April 13, 2018. Zang said if the trade tensions resulted in pricier U.S. imports, she wouldn't consider American brands when the time comes to buy a new car. "With the tariff, I would have to pay tax of 100,000 yuan to 200,000 yuan if I were to buy a new Tesla," she said. 

(REUTERS/Thomas Peter)

Zang Yi charges her Tesla car at a charging point in Beijing, China, April 13, 2018. Zang said if the trade tensions resulted in pricier U.S. imports, she wouldn't consider American brands when the time comes to buy a new car. "With the tariff, I would have to pay tax of 100,000 yuan to 200,000 yuan if I were to buy a new Tesla," she said. 

(REUTERS/Thomas Peter)

A Chinese woman tastes wine during a wine seminar in Beijing, China, April 14, 2018.

(REUTERS/Thomas Peter)

Shan Yuliang, salesperson at a cigarette and wine shop, poses with a carton of Marlboro cigarettes in Beijing, China, April 8, 2018. "The moment I saw the news about the trade war on the internet, I felt something big was coming. Previously I would not think about what brand to buy. Now I will give it a second thought and avoid buying American products to defend my country," Shan said. 

(REUTERS/Thomas Peter)

Wine tasting teacher Li Yangang poses for a picture during a wine seminar in Beijing, China, April 14, 2018. Li said in an interview that reduced sales of American wine in China would not hurt the local market because of its relatively small market share. "Australian wine and French wine would have a bigger impact," he said. 

(REUTERS/Thomas Peter)

Cartons of Marlboro cigarettes are seen stacked up on a shelf between Chinese cigarettes at a cigarette and wine shop in Beijing, China, April 8, 2018. 

(REUTERS/Thomas Peter)

Student He Bingzhang lights a Marlboro cigarette in Beijing, China, April 8, 2018. "I don't think the trade war would change my behaviour. I don't smoke a lot, probably one pack a month. Even if it costs 100 yuan, I would still buy Marlboro because it is affordable," He said. 

(REUTERS/Thomas Peter)

Student He Bingzhang poses for a picture as he smokes a Marlboro cigarette in Beijing, China, April 8, 2018. "I don't think the trade war would change my behaviour. I don't smoke a lot, probably one pack a month. Even if it costs 100 yuan, I would still buy Marlboro because it is affordable," He said. 

(REUTERS/Thomas Peter)

Guo Qingshan poses on his Harley-Davidson motorcycle in his village outside Beijing, China, April 7, 2018. "I love the sound of the engine and the muscle of the motor. When I ride it, I feel free and proud," Guo said. However, Guo has his limits. If prices rise, Guo said he wouldn't contemplate buying another Harley. 

(REUTERS/Thomas Peter)

Beef imported from the U.S. is seen at Wolfgang's, a high-end steak house in East Beijing's Sanlitun district, China, April 6, 2018. A 15-kg whole cut of beef from the United States is around 20 percent more expensive than its Australian counterpart, said Daniel Sui, deputy general manager at Wolfgang's. "Customers like U.S. beef because it tastes juicy and tender, but Wolfgang's only sells around seven to eight pieces of U.S. imported beef steak each day," Sui said. "The limited supply is because the Chinese government bans feed additives and only 5 percent of U.S. beef is qualified for export." 

(REUTERS/Thomas Peter)

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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."

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President Trump, Melania Trump with Chinese President Xi Jinping
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President Trump, Melania Trump with Chinese President Xi Jinping
U.S. President Donald Trump, right, and Xi Jinping, China's president, greet attendees waving American and Chinese national flags during a welcome ceremony outside the Great Hall of the People in Beijing, China, on Thursday, Nov. 9, 2017. The White House expects to announce upwards of $250 billion in business deals in China this week, an administration official said -- exactly the sort of U.S. jobs-based diplomacy that Trump�likes to deliver when traveling abroad. Photographer: Qilai Shen/Bloomberg via Getty Images
U.S. President Donald Trump and U.S. first lady Melania visit the Forbidden City with China� President Xi Jinping and China� First Lady Peng Liyuan in Beijing, China, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump and U.S. first lady Melania visit the Forbidden City in Beijing, China, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump and China's President Xi Jinping leave after an opera performance at the Forbidden City in Beijing, China, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump and first lady Melania enjoy an opera performance with China's President Xi Jinping at the Forbidden City in Beijing, China, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump and U.S. first lady Melania visit the Forbidden City with China's President Xi Jinping and China's First Lady Peng Liyuan in Beijing, China, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump looks at first lady Melania Trump next to Chinese President Xi Jinping as they tour the Conservation Scientific Laboratory of the Forbidden City in Beijing, China November 8, 2017. REUTERS/Andy Wong/Pool
U.S. President Donald Trump and U.S. first lady Melania visit the Forbidden City with China?s President Xi Jinping and China?s First Lady Peng Liyuan in Beijing, China, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump and Chinese President Xi Jinping tour the Conservation Scientific Laboratory of the Forbidden City in Beijing, China November 8, 2017. Looking on is Chinese first lady Peng Liyuan at left and U.S. first lady Melania Trump at right. REUTERS/Andy Wong/Pool
U.S. President Donald Trump and U.S. first lady Melania visit the Forbidden City with China's President Xi Jinping and China's First Lady Peng Liyuan in Beijing, China, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump, first lady Melania and China's President Xi Jinping pose with opera performers at the Forbidden City in Beijing, China, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump and U.S. first lady Melania visit the Forbidden City with China's President Xi Jinping and China's First Lady Peng Liyuan in Beijing, China, November 8, 2017. REUTERS/Jonathan Ernst
US President Donald Trump tours the Conservation Scientific Laboratory of the Forbidden City in Beijing on November 8, 2017. US President Donald Trump toured the Forbidden City with Chinese leader Xi Jinping on November 8 as he began the crucial leg of an Asian tour intended to build a global front against North Korea's nuclear threats. / AFP PHOTO / POOL / Andy Wong (Photo credit should read ANDY WONG/AFP/Getty Images)
US President Donald Trump and First Lady Melania Trump arrive on Air Force One in Beijing on November 8, 2017. US President Donald Trump arrived in Beijing on November 8 for the critical leg of his Asia tour to drum up an uncompromising, global front against the nuclear weapons ambitions of the 'cruel dictatorship' in North Korea. / AFP PHOTO / POOL / THOMAS PETER (Photo credit should read THOMAS PETER/AFP/Getty Images)
U.S. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj
U.S. President Donald Trump takes part in a welcoming ceremony at the Great hall of the People in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj
U.S. President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj
Xi Jinping, China's president, left, and U.S. President Donald Trump look on during a welcome ceremony outside the Great Hall of the People in Beijing, China, on Thursday, Nov. 9, 2017. The White House expects to announce upwards of $250 billion in business deals in China this week, an administration official said -- exactly the sort of U.S. jobs-based diplomacy that Trump�likes to deliver when traveling abroad. Photographer: Qilai Shen/Bloomberg via Getty Images
Xi Jinping, China's president, left, gestures while standing next to U.S. President Donald Trump, during a welcome ceremony outside the Great Hall of the People in Beijing, China, on Thursday, Nov. 9, 2017. The White House expects to announce upwards of $250 billion in business deals in China this week, an administration official said -- exactly the sort of U.S. jobs-based diplomacy that Trump�likes to deliver when traveling abroad. Photographer: Qilai Shen/Bloomberg via Getty Images
BEIJING, CHINA - NOVEMBER 09: The convoy of US President Donald Trump makes its way through Tiananmen Square before the welcome ceremony on November 9, 2017 in Beijing, China. At the invitation of Chineses President Xi Jinping, U.S President Donald Trump is to pay a state visit to China from November 8 to 10. (Photo by Lintao Zhang/Getty Images)
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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:

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