Illustration: Rebecca Zisser/Axios
The Trump administration's trade war with China entered a new phase on Sunday morning as new 15% tariffs on about $110 billion of Chinese imports took effect, Bloomberg reports.
Why it matters: Per the New York Times, the move changes the rules of trade in ways that have no recent historic precedent. "This is the first time U.S. consumers will see the costs quite directly, right as we head into the busiest shopping time of the year," Western Washington University economics professor Edward Alden told the Washington Post. China has introduced retaliatory taxes, the first phase of which came into effect Sunday.
- The world’s 2 largest economies are now even further apart by the trade war, despite President Trump and Chinese officials announcing last month plans to resume negotiations.
The state of play: American consumers can now expect higher prices on consumer items like "clothing, toys, home goods, and electronics," per the Retail Industry Leaders Association.
- J.P. Morgan estimates the tariffs will cost the average American household $1,000 a year.
- China's retaliatory tariffs range from 5% to 10% on a portion of $75 billion U.S. goods, with the second phase of taxes due to take effect Dec. 15.
What he's saying: Trump told reporters on Friday that "we’re having conversations with China" and that meetings between the 2 sides had been scheduled for September, but the tariffs were still "on."
- He denied via Twitter on Sunday morning that the tariffs would hurt American consumers.
The bottom line: Per Axios' Jonathan Swan, the biggest tool Trump has to pump the economy and the markets is a trade deal with China. But if anything, senior administration officials have turned harder against China in recent weeks thanks to national security concerns in Hong Kong and Taiwan — and these retaliatory tariffs aren't going to help.
Editor's note: This article has been updated with President Trump's latest comments.