Trump to slap 25% tariffs on up to $50 billion of Chinese goods; China retaliates

The Trump administration will impose a 25 percent tariff on up to $50 billion in Chinese goods, a decision that brought swift retribution from Beijing as trade conflicts between the world's two largest economies escalate.

In a statement Friday, President Donald Trump said the measures will affect Chinese goods "that contain industrially significant technologies." The action comes "in light of China's theft of intellectual property and technology and its other unfair trade practices," he added.

Trump noted that the White House could impose additional tariffs if China retaliates with duties of its own on American crops or other products. Beijing did just that on Friday.

China's Commerce Ministry responded quickly to Trump's statement. "We will immediately introduce taxation measures of the same scale and the same strength. All the economic and trade achievements previously reached by the two parties will no longer be valid at the same time," China said in a statement translated by CNBC.

The United States Trade Representative said the U.S. will initially impose a set of tariffs on 818 items worth about $34 billion on July 6. Separate measures affecting 284 products worth about $16 billion could take effect following a review and public comment process.

China's retribution, meanwhile, will take the form of tariffs on 545 U.S. goods worth $34 billion on July 6. Those items will include agriculture and automobiles — politically sensitive sectors for Trump. Beijing's overall tariff plan will hit about $50 billion worth of 659 American goods.

The action Friday marks Trump's latest move to crack down on what he deems as unfair trade practices by major trading partners. He is already embroiled in an escalating trade conflict with Canada, Mexico and the European Union. Those entities cried foul and retaliated when Trump imposed steel and aluminum tariffs on them.

Taken together, the trade conflicts — and the threat of even more barriers — raise the specter of damage to a healthy American economy that the president frequently trumpets.

Speaking to "Fox and Friends" on Friday morning, Trump downplayed concerns about a trade war with China.

"The trade war was started many years ago by them and the United States lost," he said.

China's discontent with the tariffs could also affect another key Trump effort: the push to get North Korea to abandon its nuclear and missile programs. Getting Pyongyang to agree to firm denuclearization will rely in large part on the application of international economic sanctions.

China, North Korea's only major ally, is critical to the effort to keep economic pressure on North Korea. Following a summit between Trump and North Korean dictator Kim Jong Un this week that led to a loose commitment to denuclearization, China suggested it could relieve sanctions on Pyongyang.

Trump's action drew support from one of the president's biggest critics, the Senate's top Democrat, Chuck Schumer, who said "Trump's actions are on the money."

Some Republican lawmakers and pro-business groups criticized Trump's action. While Sen. Orrin Hatch, R-Utah, applauded Trump for taking on China, he said "tariffs will harm American and Chinese businesses and consumers, and will put economic growth in both countries at risk."

"Ill-conceived trade actions that weaken the American economy, alienate allies, and invite retaliation against American businesses, farmers and ranchers, undermine our nation's ability to successfully confront China's unfair trade policies," the Senate Finance Committee chairman said.

U.S. Chamber of Commerce President and CEO Thomas Donohue said tariffs are "not the right approach."

"Imposing tariffs places the cost of China's unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers, and ranchers," he said in a statement.

National Association of Manufacturers President and CEO Jay Timmons pushed the administration to instead secure a bilateral trade agreement. He said that "rather than pursuing a piecemeal tariffs approach, now is the time to seize the opportunity before us and work toward a U.S.-China trade agreement that will benefit American workers for generations to come."