Just as financial markets were starting to believe that all the bluster about imposing new provocative tariffs on Chinese imports might indeed be just a negotiating ploy as administration officials loudly proclaimed over the last to days, last night President Donald Trump demanded that his chief trade negotiator find an additional $100 billion in Chinese imports to consider for new tariffs.
“Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,” Trump said in a statement Thursday evening that referred to list of $50 billion in U.S. exports that China would hit with new tariffs if the Trump administration followed through with its plan to impose 25% tariffs on $50 billions in Chinese imports.
U.S. stock markets were closed when the White House released the President’s statement, but at 10:30 p.m. New York time the Dow futures were down 282 points or 1.15% and S&P 500 futures were lower by 0.97%. That’s a sign that traders think markets are likely to open down Friday.
“In light of China’s unfair retaliation, I have instructed the USTR [U.S. trade representative] to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs,” Trump said in his statement. Xinhua, China’s state news agency, said later that Beijing vowed to defend its interests “against new U.S. actions.