In an attempt to level the playing field over intellectual property theft concerns, US President Donald Trump has called for heavy tariffs against China.
In a heavily anticipated move, US President Donald Trump has ordered at least $50 billion worth of tariffs on Chinese imports, saying they will be “the first of many.”
On Thursday (March 22) afternoon, Trump signed a memorandum ordering US Trade Representative Robert Lighthizer to impose the tariffs.
A list of products that will see higher tariffs will be created over the next two weeks. Trump has declared that they could affect up to $60 billion worth of goods.
The tariffs against China come after Trump ordered an investigation into Chinese policies this past August. The White House is said to have found evidence of unfair trade practices such as currency manipulation and stealing US intellectual property, which has proven to be a particularly sore spot.
“This has been long in the making,” Trump said. “We have a tremendous intellectual property theft situation going on.”
Despite the mounting evidence that the White House claims to have against China’s trade activity, the Asian nation’s Ministry of Commerce released a statement on Thursday saying it would not take the implementation of tariffs lightly.
“We firmly oppose this kind of unilateralism and trade protectionism by the United States. [China] will certainly take all necessary measures to resolutely defend its legitimate rights and interests,” it said.
“We hope that the United States will understand the nature of the mutually beneficial and win-win outcomes of Sino-U.S. economic and trade relations, and will not take actions that harm people and their own interests,” the ministry also said in the missive.
The move has escalated pre-established concerns of a trade war between the US and China among both investors and policymakers; it could potentially undermine the future of global growth.
Along with the Bank of England, which on Thursday discussed the “significant negative impact” that protectionism could entail for the global economy, US Federal Reserve Chair Jerome Powell touched on the central bank’s concerns surrounding trade policies on Wednesday.
“A number of participants reported about their conversations with business leaders around the country and reported that trade policy has become a concern,” Powell said.
In anticipation of Trump’s tariff announcement, US stocks took a heavy hit on Thursday, with the Dow Jones Industrial Average (INDEXDJX:.DJI) dropping as much as 500 points from Wednesday’s (March 22) close. Meanwhile, the S&P 500 (INDEXSP:.INX) was down 1.1 percent as of 12:30 p.m. EST.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.