Trump raises China tariffs as trade war escalates

U.S. President Donald Trump said Friday that he will boost tariffs on $550 billion worth of Chinese imports in the latest escalation of the trade war between Washington and Beijing.

The move follows China's announcement earlier in the day that it would impose tariffs of 5% or 10% on $75 billion of U.S. goods and reinstate duties on American cars. The tariffs will take effect in two batches on Sept.1 and Dec. 15.

"China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!)", Trump said on Twitter in an official statement announcing the tariffs. "Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30%."

"Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. Thank you for your attention to this matter!"

Prior to his tariff announcement, Trump ordered U.S. companies to "immediately start looking for an alternative to China", sending stocks into a nosedive amid fears of an escalating trade war between the world's top two economies that has already sent shockwaves through global markets.

He also heaped blame on Federal Reserve Chairman Jerome Powell, questioning whether he or Chinese President Xi Jinping "is our bigger enemy" while calling for the Fed to lower interest rates and pursue a policy of injecting cash into the U.S. economy.

Trump handpicked Powell to head the Fed.

The Dow closed down 623 points following Trump's initial Twitter tirade before he vowed higher tariffs, increasing the likelihood that markets will open lower Monday.

Investors' concerns have been growing amid fears of a global recession.

The National Retail Federation slammed Trump's latest tariff vow in a statement, saying it is a dead end.

"It's impossible for businesses to plan for the future in this type of environment," Senior Vice President of Government Relations David French said in a statement. "The administration's approach clearly isn't working, and the answer isn't more taxes on American businesses and consumers. Where does this end?"