President Donald Trump’s trade war against China is escalating.
The White House confirmed Tuesday that Trump is placing a 50% tariff on China that is in addition to previously implemented or announced levies. Trump hit China with a 20% tariff at the beginning of his term, and his “Liberation Day” tariff rollout included another 34% on China.
The new tariff brings the cumulative total on China to 104%. Alongside the other countrywide tariffs announced last week, the extra 84% will take effect at midnight. In his first term Trump placed 25% or 10% tariffs on a bevy of Chinese exports.
The stock market has faltered on the news. Major indexes were up by roughly 4% in early morning trading but slipped into the red as the market approached close on Tuesday.
Homebuilders — which rely on China for imports of hardware, appliances, glass and plumbing fixtures — are hit particularly hard by Chinese tariffs. While Mexico, Canada and Vietnam also send construction materials to the U.S., China provides both a significantly higher amount of construction imports and now boasts an extremely high tariff rate, according to the National Association of Homebuilders.
Publicly traded homebuilders saw their equities decline in the hour after the news broke. LGI Homes (8%), KB Home (3%), D.R. Horton (3%), Tri Pointe Homes (2.5%), Toll Brothers (2.4%) and Lennar (2%) all fell.
Trump’s dramatic escalation comes in response to China placing on the United States a reciprocal tariff rate of 34%, which matches what Trump scheduled for China last week.
Trump promised that his new global tariff regime would similarly match what other countries have on the United States, but recent reports suggest they’re in excess. The formula by which the Trump administration calculated the new tariff rates — which internet sleuths discovered — led to imbalances.
For example, Japan has a 2% tariff rate on the U.S., but Trump will impose a 24% levy on them, though Japan is one of the country’s most reliable trade partners and allies.
The Trump administration has sent mixed signals on the president’s master plan, with some indicating he’s in it for the long haul while others say he’s open to making deals.
Despite being less than a week since the global tariffs were announced, the chaos in markets is already splitting business executives and members of the Trump administration itself. On Monday leaders in the financial industry publicly expressed dismay over the levies, albeit gingerly.
Elon Musk has also spoken out, suggesting that the tariff rate on the European Union — which will be 20% as of midnight — should be zero. He’s also lobbed numerous personal attacks on Trump advisor Peter Navarro, who is a staunch and vocal supporter of high tariffs.
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