President Donald J. Trump has signed a presidential memorandum that could lead to new tariffs on $60 billion (£42.5bn) worth of Chinese exports to the United States. The new tariffs, if imposed, would equal the value of more than 10 percent (CNN) of Chinese goods sent to the U.S. in 2017.
The memorandum allows for a consultation period where industry groups and Congress can potentially amend the proposal. By not immediately imposing tariffs, China also has time to review their trade policy, reducing the risk of a “trade war,” a prospect that Trump previously appeared to support.
The Trump administration has accused China of unfair trade practices, including stealing U.S. intellectual property such as software and technology patents. Administration officials said this has killed thousands of jobs for Americans, according to the New York Times.
Trump will also tell the Treasury Department to restrict Chinese investments in the U.S., particularly in innovative sectors such as artificial intelligence and mobile technology.
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Beijing said it will retaliate if Trump goes through with the plan. “China will not sit idly by while legitimate rights and interests are hurt. We must take all necessary measures to firmly defend our rights and interests,” said the Commerce Ministry.
U.S. Federal Reserve Chairman Jerome Powell said the prospect of a trade war is a growing threat to the United States (CNBC). Concerns over such a prospect led to U.S. and European stocks to fall on Thursday (FT). On Wall Street, the opening trade of S&P 500 fell by over one percent.
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