Last week, the Trump Administration raised tariffs to 25% on $200 billion worth of goods that previously were subject to 10% tariffs. The increased rate in tariffs were brought on as a result of accusations that the Chinese delegation to the trade negotiations back-tracked on previous agreements, and the increase was meant to ratchet up pressure on China to make a deal.
This week, China retaliated by raising tariffs on $60 billion of U.S. goods. The goods targeted already were subject to some tariffs. Now 5,140 tariff lines will be subject to an increased rate, including 2,493 cotton, machinery and grain products that are going to be subject to a 25% tariff from a previous 10% tariff rate; and 1,078 products, including aircraft parts, optical instruments and certain types of furniture that will be subject to a 20% tariff rate from a previous 10% tariff rate; and 974 products, including corn flour and wine, will have a 10% tariff rate – up from 5%.
In response to the retaliatory tariffs from China, President Trump tweeted: “. . . China should not retaliate-will only get worse!” The proposed rates will take effect on June 1.