President Donald Trump announced he would impose 100 percent retaliatory tariffs on China starting next month as well as new export controls on “critical software” after raging about China’s aggressive trade posturing.
The president made his announcement in a post on Truth Social late Friday. He said the tariffs will kick in on November 1.
Trump said he was going to take the dramatic step in response to China’s “extremely hostile letter to the World” that the country would begin imposing export controls on November 1.
“This affects ALL Countries, without exception, and was obviously a plan devised by them years ago. It is absolutely unheard of in International Trade, and a moral disgrace in dealing with other Nations,” Trump wrote of China’s actions.
Apart from imposing export controls on rare earth metals, China also opened a monopoly investigation into U.S. chip giant Qualcomm.
The president’s post on 100 percent tariffs came just before 5 pm ET, following another threat by the president on social media earlier in the day, where he claimed the U.S. was calculating a “massive increase of Tariffs on Chinese products.”
Trump’s threat sent the stock market tumbling. The Dow closed down more than 878 points while the S&P 500 was down 2.7 percent, its deepest plunge since April.
The last time China tightened export controls in response to Trump’s tariffs on Chinese goods earlier this year, U.S. companies sounded the alarms as 90 percent of the U.S.’s rare earth minerals come from China. Ford even temporarily halted production.
The president has been threatening staggering tariffs on countries around the globe since taking office. In some cases he has repeatedly backed off while working to renegotiate trade deals, earning him the nickname TACO from some on Wall Street for “Trump Always Chickens Out.”
However, the president’s widespread tariffs have raked in billions of dollars in revenue since he took office. The U.S. has brought in some $194 billion in tariff revenue since the start of the year according to tracking by the Bipartisan Policy Center.
Economists have warned the tariffs will drive up prices for consumers in the U.S. which has already begun in certain areas of the economy, but in some cases, companies have been eating the increased costs so far and consumer spending remains strong.
The president’s 100 percent tariffs on China come just two weeks before Trump is set to meet with Chinese President Xi Jinping. Early on Friday, the president threatened to pull out of the meeting in South Korea writing “now there seems to be no reason to do so.”
The escalating fight comes as American farmers have already being crushed in the trade war after China, the largest buying of U.S. soybean exports, stopped buying.
With farmers sounding the alarms, the president has already vowed to use some of the tariff revenues collected to bail out farmers.
Last year, China purchased more than $12 billion worth of U.S. soybeans. This year, the country has not purchased any U.S. soybean exports.