A trade war looms as Trump slaps tariffs on Chinese imports

UNITED STATES.- President Donald Trump brought the world’s two biggest economies to the brink of a trade war Friday by announcing a 25 percent tariff on up to $50 billion in Chinese imports to take effect July 6.

China’s government responded quickly to U.S. President Donald Trump’s tariff hike on Chinese goods by announcing Friday it will immediately impose penalties of “equal strength” on U.S. products.

In announcing the U.S. tariffs, Trump said he was fulfilling a campaign pledge to crack down on what he contends are China’s unfair trade practices and its efforts to undermine U.S. technology and intellectual property.

“We have the great brain power in Silicon Valley, and China and others steal those secrets,” Trump said on “Fox & Friends.” ‘’We’re going to protect those secrets. Those are crown jewels for this country.”

The prospect of a U.S.-China trade war jolted financial markets Friday. The Dow Jones industrial average was down more than 220 points in mid-afternoon trading. Other stock averages also sank. The U.S. tariffs will cover 1,102 Chinese product lines worth about $50 billion a year. Included are 818 items, worth $34 billion a year, from a list of 1,333 the administration had released in April. After receiving public comment, the U.S. removed 515 product lines from the list, including TVs and  some pharmaceuticals, according to a senior administration official who briefed reporters on condition of anonymity.

The administration is targeting an additional 284 Chinese products, which it says benefit from Beijing’s strong-armed industrial policies, worth $16 billion a year. But it won’t impose those tariffs until it gathers public comments. U.S. companies that rely on the targeted imports — and can’t find substitutes — can apply for exemptions from the tariffs.

The Trump administration has sought to protect consumers from a direct impact from the tariffs, which amount to a tax on imports. The tariffs target mainly Chinese industrial machinery, aerospace parts and communications technology, while sparing such consumer goods as smartphones, TVs, toys and clothes that Americans purchase by the truckload from China.