Trump said in a statement on Thursday that the further tariffs were being considered “in light of China’s unfair retaliation” against earlier US trade actions. He added that the US trade representative had determined that China “has repeatedly engaged in practices to unfairly obtain America’s intellectual property”. 

The White House said Trump had instructed the Office of the United States Trade Representative, the agency responsible for developing and recommending trade policy, to consider whether the additional tariffs would be appropriate under section 301 and, if so, to identify which products they should apply to.

He’s also instructed his secretary of agriculture “to implement a plan to protect our farmers and agricultural interests”.

“Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers”, Trump said.

Trump argues China’s trade practices have led to the closure of American factories and the loss of millions of American jobs. 

China’s state-run tabloid Global Times called Trump’s latest threat “ridiculous” in an editorial on Thursday, noting that it “reflects the deep arrogance of some American elites in their attitude towards China.”

Trump’s move comes one day after China issued a $50bn list of US goods including soybeans and small aircraft for possible tariff hikes. That itself was 11 hours after the White House announced a list of 1,333 Chinese imports, also worth about $50bn, for punitive tariffs of 25%.

“Hopefully the president is just blowing off steam again but, if he’s even half-serious, this is nuts,” said the senator Ben Sasse, a Republican from Nebraska, who has been critical of the president’s posture on trade. “China is guilty of many things, but the president has no actual plan to win right now. He’s threatening to light American agriculture on fire.”

The tit-for-tat has rattled stock marketson worries over a full-blown trade war between two of the world’s largest economies. US stock futures fell more than 1% following Trump’s announcement, made after the close of trading. In currency markets, the dollar fell against Japan’s yen.

The National Retail Federation, a Washington-based trade group, said in a statement, “We urge the administration to change course and stop playing a game of chicken with the nation’s economy.”

Last month, the US president claimed that “trade wars are good, and easy to win”. Trump has said the tariffs will push Beijing to change policies that force American companies to give up their intellectual property to Chinese businesses, a policy the US believes is part and parcel of one of Beijing’s key industrial plans, Made in China 2025.

On Wednesday, Trump sought to play down concerns, saying on Twitter: “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the US. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!”

He added: “When you’re already $500 Billion DOWN, you can’t lose!”

However, if China matched the White House’s threats to subject as much as $150bn in Chinese goods to tariffs, it would more than cover total US exports to the country.

The US exported around $130bn to China last year, mainly in agricultural products like soybeans and grains, as well as vehicles, aircraft, and pharmaceuticals — items included in China’s list released on Wednesday. Trump’s threatened increase of tariffs on Chinese goods would affect only about 30% of what China exports to the US.

Beijing has not signalled any willingness to back down. China’s People’s Daily, the official voice of the ruling Communist Party said in an editorial on Thursday: “Within 24 hours of the US publishing its list, China drew its sword, and with the same strength and to the same scale, counterattacked quickly, fiercely and with determination”.

The two sides have still left room for manoeuvre. US tariffs will not come into effect until after a public comment and consultation period that should take about two months. China has said implementation of its tariffs will depend on the US.

A senior US official told Reuters that the US was willing to negotiate with China, though no formal negotiations had been set.

China’s economic tsar, Liu He, has spoken over the phone with the US treasury secretary, Steven Mnuchin and reportedly exchanged letters with Mnuchin and US trade representative Robert Lighthizer.

“We are at a critical juncture where the US may have its maximum leverage to get changes in China, and both sides are at least talking about talking,” said Claire Reade, senior counsel at Arnold & Porter, who advises on Chinese regulatory and governmental issues. “If the two sides can reach an agreement in the next 60 days, [then] no trade war.”

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