On Friday President Trump announced via WhiteHouse.gov, that “in light of China’s theft of intellectual property and technology, the United States, starting July 6th, “will implement a 25% tariff on $50 billion of goods from China that contain industrially significant technologies.”
The announced tariff will effect roughly 1,100 exports and be implanted in two phases, the first, according to CNN Money, effects roughly 800 exports, about $34 billion worth. While 280 exports still have to undergo a public comment period and will take effect later.
China has already said it will fight back with retaliatory tariffs on $50 billion of U.S. products. China’s Commerce Ministry said in a statement Friday, via, CNN Money, “In this day and age, launching a trade war is not in the interest of the world. We call on all countries to act together to firmly stop such an outdated and backward move, and to firmly safeguard the common interest of all mankind.”
The tariff announcement comes only weeks after President Trump imposed a 25% tariff on steel and a 10% tariff on aluminum which lead Mexico to retaliate with tariffs of their own on about $3 billion worth of exports, CNN Money reported on June 6th, the products include pork, apples, potatoes, bourbon, and different types of cheese.
Canada and the European Union have announced retaliatory tariffs of their own starting in July.
Gary Cohn, President Trump’s former National Economic Council Director, on Thursday spoke with Washington Post Live.
In the 4 minute and 59 second video he explains the goal of the U.S. is to get everyone to lower their tariffs and trade barriers, however, he notes, there is a a “lot of friction in the trading system.”
Asked if he is worried we are entering a trade war he says, “I’ve always been worried trade can have a derailing effect on the U.S. economy.”
Asked if this can lead to a recession he answers, “One thing I know about recessions is you never know what leads you in till you’re in it.” he adds, “if you end up with a tariff battle, you will end up with price inflation, you could end up with more consumer debt.”
Asked if this battle could wipe out the tax bill benefits he replies, “yes it could.”