This Supply Chain Matters blog is to inform our readers of breaking news regarding an announcement from China’s State Council to impose new tariffs on $75 billion of U.S. products coupled with resuming duties on U.S. auto imports, each scheduled to go into effect on September 1 and December 15. President Trump immediately took to Twitter to voice his displeasure and anger at this development. Global trade

The China imposed tariffs will range from 5 to 10 percent on auto parts and components along with imposing 25 percent tariffs on U.S. produced autos, each scheduled to go into effect on December 15.

This retaliatory measure came after the Trump Administration elected to delay tariffs on a yet to be disclosed, select number of products, as well as eliminate duties on certain others, that were all scheduled to take effect at the beginning of September.

U.S. equity markets reacted immediately to this news, and as of this posting, the Dow is experiencing a 450-point decline, similar to immediate reactions to prior negative trade war escalation related news.

 

Trump Responds

President Donald Trump immediately took to Twitter to voice his anger regarding the Chinese announcement.

In one “tweet” he wrote: “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi,” in essence, labeling China as an enemy.

In another and more pertinent tweet to our Supply Chain Matters reading audience, the President “ordered” companies to “immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.

Yes, ladies and gentlemen, the President of the United States has taking the measure to order companies to exit China’s markets and supply networks. That should make for some interesting hallway and cocktail discussions for the rest of today and into the weekend. Do not be surprised with incoming phone calls seeking clarification or other response communications.

That is not a joke and U.S. financial commentators are reeling as to what all of this implies as to a new escalation of tensions among two large and very significant global economies.

The White House did not immediately respond when asked if the announcement, delivered in a four-part Twitter thread, constituted an official order by the President.

At the time of our penning of this blog, President Trump was meeting with his key trade advisors and markets, and indeed ourselves, are speculating as to what will come next. Some political pundits speculate that it is possible that the Trump Administration’s  threatened response could be to reimpose the delayed tariffs or to let today’s announcement pass and attempt to re-ignite stalled trade talks.

This is obviously a developing set of events and Supply Chain Matters will provide later updates.

 

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