Trump Calls on U.S. Companies to Stop Manufacturing in China, Raises Tariffs

The U.S. President announced an additional tariff increase of 5% on imports from China.

In a series of tweets on Friday, U.S. President Donald Trump called on all U.S. companies to stop manufacturing their products in China and announced an additional tariff increase of 5% on imports from China.

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Bringing companies home

"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," Trump tweeted.

The move came hours after the president criticized Chinese plans to hit $75bn of U.S. goods with duties in what seems to be an escalating trade war.

"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 further tweeted. "As president, I can no longer allow this to happen!"

China has plans to increase duties between 5% and 10% on more than 5,000 U.S. products and re-impose a suspended 25% duty on U.S. car imports. The new tariffs are set to be imposed in two stages on 1 September and 15 December.

In the meantime, Trump revealed in his Friday tweets that he would raise U.S. tariffs on $250bn of Chinese imports from 25% to 30% starting on 1 October. In addition, planned tariffs on $300bn of other Chinese goods would now be 15% instead of 10%.

Does the U.S. need China?

These last set of tariffs were supposed to go in effect on 1 September but Trump delayed them to 15 December to avoid the popular holiday shopping season. Trump insists that the U.S. does not need China.

"We don't need China and frankly, would be far better off without them," he said in his tweets. However, vendors have disputed this claim telling the White House that consumer electronics production relies heavily on Chinese manufacturing.

"It would cause significant supply chain disruption to shift sourcing entirely to the United States or a third country, and it would increase costs—even beyond the cost of the proposed tariffs—on products that are already manufactured under tight margin conditions," said, in a June letter to the US Trade Representative's office, video game makers Microsoft, Sony, and Nintendo.

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