President Donald Trump is preparing to slap tariffs on Chinese goods early Friday, the first shot in a trade war between the world’s two biggest economies.
Tariffs on $34 billion of Chinese goods are scheduled to take effect at 12:01 a.m. in Washington, the U.S. Trade Representative confirmed in an email Thursday. The milestone marks a new and damaging phase in a conflict that has roiled markets and cast a shadow over the global growth outlook.
In Beijing, policy makers are digging in for what could be a protracted fight — one in which they say they won’t be the aggressor. Beijing has said retaliatory tariffs on U.S. goods ranging from soybeans to pork will go into effect immediately after the U.S. acts.
With further tit-for-tat levies already threatened between the U.S. and China, some investors are concerned this week may mark the start of a trade war that spreads globally. Trump has already imposed tariffs on imported steel, aluminum, solar panels and washing machines.
As the deadline approached with little sign of a last-minute deal, U.S. stocks pared gains. The Standard & Poor’s 500 Index rose 0.7 percent at 1:35 p.m. in New York, heading for the best gain in four weeks.
The looming tariffs have prompted central bank officials to try to reassure investors. The European Union has taken a firm stance ahead of the escalation, with Bank of England Governor Mark Carney saying that the rise of protectionism will affect trade flows and push up import costs.
“This is a dark day for economists. We’ve generally seen freer and freer trade since World War II, and now we seem to be reversing that,” David Dollar, senior fellow at the Brookings Institution in Washington and a former U.S. Treasury attache in Beijing, said in a Bloomberg Television interview on Thursday. “China is committed to retaliating proportionally.”
Here’s a rundown of the key facts about China’s position in the conflict:
What goods are to be targeted?
On June 15, Trump said the U.S. would begin charging additional duties of 25 percent on $50 billion worth of Chinese imports in response to what he says is theft of American intellectual property. That’s split into two rounds — $34 billion on Friday and $16 billion later.