Trump heaps another 5% tariff on Chinese goods

Move comes hours after China unveiled retaliatory tariffs on $75b worth of US goods

WASHINGTON/BEIJING: US President Donald Trump on Friday lashed back at a new round of Chinese tariffs by heaping an additional 5% duty on some $550 billion in targeted Chinese goods in the latest tit-for-tat trade war escalation by the world's two largest economies.

Trump's move, announced on Twitter, came hours after China unveiled retaliatory tariffs on $75 billion worth of US goods, prompting the president earlier in the day to demand US companies move their operations out of China.

The intensifying US-China trade war stoked market fears that the global economy will tip into recession, sending US stocks into a tailspin, with the Nasdaq Composite down 3% and the S&P 500 down 2.6%.

US Treasury yields also declined as investors sought safe-haven assets, and crude oil, targeted for the first time by Chinese tariffs, fell sharply.

Trump's tariff response was announced after markets closed on Friday, leaving potentially more damage for next week.

"Sadly, past administrations have allowed China to get so far ahead of fair and balanced trade that it has become a great burden to the American taxpayer," Trump said on Twitter. "As president, I can no longer allow this to happen!"

He said the United States would raise its existing tariffs on $250 billion worth of Chinese imports to 30% from the current 25% beginning on October 1, the 70th anniversary of the founding of the communist People's Republic of China.

At the same time, Trump announced an increase in planned tariffs on the remaining $300 billion worth of Chinese goods to 15% from 10%. The United States will begin imposing those tariffs on some products starting September 1, but tariffs on about half of those goods have been delayed until December 15.

Trump calls US firms to exit China

Trump pressured US companies to leave China after Beijing unveiled retaliatory tariffs on $75 billion in US goods, stoking fears their escalating trade war will tip the global economy into recession.

Trump, who has accused China of unfair trade practices and pushed for a deal that would rebalance the relationship in favour of US manufacturers and workers, said on Twitter he will issue a response to Beijing's latest tariff plan on Friday afternoon.

The president was meeting with his trade team at midday, a senior White House official told Reuters.

"We don't need China and, frankly, would be far better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must stop," Trump tweeted.

"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies home and making your products in the USA."