Lashing out on Twitter against China’s plan to impose retaliatory tariffs against U.S. products, President Donald Trump made this demand: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”

The tweet raises many questions, including whether the president has the authority to “order” American companies to find alternatives to manufacturing in China. Stocks fell sharply across the board, but technology companies were among the worst hit.

His idea sounds nice in theory—let’s make American technology manufacturing great again!—but it ignores the complexity and interconnectedness of global supply chains. The fact is, the president’s demand is largely impossible to fulfill.

American technology companies rely on China for components, for manufacturing and as buyers of goods. China is the world’s second-largest economy, with the largest population, and the biggest manufacturing base. It is also the top exporter, and after the U.S., the world’s largest importer.

While the president might not like it, the fact is that the two nations are inextricably entwined. Still, his demand is dragging tech shares lower.

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The poster child for U.S.-China trade tensions remains Apple (ticker: AAPL), which generates close to 20% of its revenues there, and which has claimed it has created 4.8 million jobs in China in manufacturing, apps, and other areas. The company also operates more than 40 retail stores in China.

Companies like Apple rely on contract manufacturers in China for many reasons. The cost and abundance of labor is one reason, but so is capacity and manufacturing sophistication. As much as the White House might like companies like Apple to extricate themselves from China, what he is asking would be both almost impossible and economically disastrous.

What the president’s demand does signal is that any thawing of the trade war with China is far away. That is not good news for the many technology companies that manufacture, buy parts, or sell goods there.

Apple shares were down 4% on Friday afternoon. Chip stocks, which have huge exposure to China in terms of revenue, were hit hard as well. Intel (INTC) was down 3%, Micron Technology (MU) fell 3.5%, and Advanced Micro Devices (AMD) declined by 5%.

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Sellers of tech hardware were down, too: Dell Technologies (DELL) was off 5.3%, and Cisco Systems (CSCO) dropped by 2%. Among Chinese stocks, Alibaba Group Holding (BABA) was down 3.5%, while Hon Hai Precision Industry (HNHPF), a Taiwan-based business with a lot of manufacturing capacity in China, was off 2%.

The Nasdaq Composite, dominated by technology shares, was down 2.7%, outstripping respective losses of 2% and 2.2% in the Dow Jones Industrial Average and the S&P 500.

Write to Eric J. Savitz at eric.savitz@barrons.com </s> WASHINGTON (Reuters) - President Donald Trump said on Friday he was ordering U.S. companies to look at ways to close their operations in China and make more of their products in the United States instead, a rhetorical strike at Beijing as trade tensions mounted.

Trump cannot compel U.S. companies to abandon China and he gave no detail on how he might proceed with any such order, although he said he would be offering a response later on Friday to tariffs on U.S. products announced by China earlier in the day.

“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA,” Trump said on Twitter. “We don’t need China and, frankly, would be far better off without them.” </s> President Donald Trump on Friday counterpunched against retaliatory tariffs announced by Beijing earlier in the day, pledging to hike the rates importers must pay on Chinese-made goods even higher.

Trump said the US will raise tariffs from 25% to 30% on $250 billion in goods that are already being taxed starting October 1.

He also threatened to ratchet up promised tariffs on the remaining $300 billion in Chinese imports from 10% to 15%. Those tariffs, which would hit mostly consumer items, are set to begin taking effect September 1, though most goods will be duty-free until December 15 — a move Trump made to avoid putting a damper on holiday retail sales.

The President’s announcement came after Beijing unveiled a new round of retaliatory tariffs on about $75 billion worth of US goods. China will place additional tariffs of 5% or 10% on US imports starting on September 1, according to a statement posted by China’s Finance Ministry.

It was the latest escalation in an ongoing trade war that has triggered a worldwide economic slowdown and which, for the moment, shows no sign of quick resolution.

“China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!),” Trump said on Twitter.

The intensifying fight unnerved investors, sending the Dow dropping more than 700 points at its worst, closing down 2.4%, or 623 points.

The US Trade Representative Office, which acts as the country’s top trade negotiator, said it would “begin the process of increasing the tariff rate to 30% effective October 1 following a notice and comment period.”

Earlier Friday, Trump ordered US companies doing business in China to find an “alternative” and had promised to deliver further action after he met with his economic team at the White House.

“We don’t need China and, frankly, would be far better off without them,” Trump tweeted. “Our great companies are ordered to immediately start looking for an alternative to China, including bringing your companies HOME.”

China trade experts said the moves will only deepen the impasse between Washington and Beijing.

“Everyone knew this was coming,” said Craig Allen, president of the US-China Business Council. “There was no doubt this was coming. The response to it is surprising and disappointing. ”

Stocks finished a volatile trading day sharply in the red Friday, after a selloff driven by the new retaliatory tariffs from China and the President’s criticism of Federal Reserve policy.

Trump again attacked Federal Reserve Chairman Jerome Powell over interest rates, which Trump insists are too high even after a rate cut last month.

“My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” the president tweeted referring to Chinese leader Xi Jinping. </s> WASHINGTON: President Donald Trump said on Friday he was ordering US companies to look at ways to close their operations in China and make more of their products in the United States instead, a rhetorical strike at Beijing as trade tensions mounted.Trump cannot legally compel US companies to abandon China immediately and he gave no detail on how he might proceed with any such order, although he said he would be offering a response later on Friday to tariffs on American products announced by China earlier in the day.The US dollar rose sharply against the Chinese yuan, US stock markets fell and oil prices dropped on Trump's latest salvo against China."Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA," Trump wrote on Twitter . "We don't need China and, frankly, would be far better off without them."Experts said tax policy changes and sanctions could be used to restrict or reduce US business activity in China, but it would take years to disentangle the world’s two largest economies. The consequences of a complete break to the world economy would be severe, they said.China, for instance, holds $1.11 trillion in US Treasury securities.For many products sold in the United States, there are few alternatives to Chinese production, and shifting production for major goods produced there could take years and be expensive.American companies could also sue the US government in response to any order to shutter plants in China. The most effective option for Trump would be to restrict federal procurement from any companies that do business in China.Bill Reinsch, a former senior Commerce Department official, said Trump had limited options to force US companies to quit China, and it would make little economic sense.That would hit companies like Boeing Co, Apple Inc and General Motors Co, which are both big US contractors and have large business interests in China."We can’t be a market economy and do that," Reinsch said. "No one’s going to pay attention to it anyway. Companies do what they’re going to do."Many US companies have already begun moving some operations out of China due to rising labor costs. But others, including General Motors, have large plants there to supply the Chinese market. They would resist any pressure to close their facility there, given the size and importance of the Chinese market, Reinsch said.Last week, Trump backed off his September 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods.The US Trade Representative's Office delayed tariffs on more than half the $300 billion in Chinese-made goods telling companies the delay covered product categories where China supplies more than 75 percent of total US imports. </s> WASHINGTON – Reacting to a new round of Chinese tariffs imposed on U.S. goods, President Donald Trump said Friday that he ordered U.S. companies to "start looking for an alternative to China" – though it was not clear what order he was referring to.

In a series of tweets posted before Trump flies to France for the G-7 meeting of world leaders – where the global economy and trade issues will take center stage – Trump blasted China's latest action and vowed to announce retaliatory moves soon.

"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing our companies HOME and making your products in the USA," Trump wrote. "I will be responding to China’s Tariffs this afternoon."

White House officials did not respond to questions about what actions, specifically, what Trump was referring to. His posts came hours after Chinese officials announced in state media they impose tariffs ranging from 5% to 10% on an additional $75 billion in U.S. goods, further escalating trade tensions between Washington and Beijing. </s> (CNN) — President Donald Trump on Friday counterpunched against retaliatory tariffs announced by Beijing earlier in the day, pledging to hike the rates importers must pay on Chinese-made goods even higher.

Trump said the US will raise tariffs from 25% to 30% on $250 billion in goods that are already being taxed starting October 1.

He also threatened to ratchet up promised tariffs on the remaining $300 billion in Chinese imports from 10% to 15%. Those tariffs, which would hit mostly consumer items, are set to begin taking effect September 1, though most goods will be duty-free until December 15 — a move Trump made to avoid putting a damper on holiday retail sales.

The President’s announcement came after Beijing unveiled a new round of retaliatory tariffs on about $75 billion worth of US goods. China will place additional tariffs of 5% or 10% on US imports starting on September 1, according to a statement posted by China’s Finance Ministry.

“We’re having a little spat with China and we’ll win it,” Trump told reporters Friday night before departing for the annual G7 summit in Biarritz, France. “We put a lot of tariffs on China today, as you know. They put some on us, we put a lot on them.”

“We’re up to about $550 billion — they’ve been hitting us for many, many years for over $500 billion a year, taking out of our country much more than 500 billion a year,” he added. “So we want that stopped.”

It was the latest escalation in an ongoing trade war that has triggered a worldwide economic slowdown and which, for the moment, shows no sign of quick resolution.

“China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!),” Trump said on Twitter.

The intensifying fight unnerved investors, sending the Dow dropping more than 700 points at its worst, closing down 2.4%, or 623 points.

The US Trade Representative Office, which acts as the country’s top trade negotiator, said it would “begin the process of increasing the tariff rate to 30% effective October 1 following a notice and comment period.”

Earlier Friday, Trump ordered US companies doing business in China to find an “alternative” and had promised to deliver further action after he met with his economic team at the White House.

“We don’t need China and, frankly, would be far better off without them,” Trump tweeted. “Our great companies are ordered to immediately start looking for an alternative to China, including bringing your companies HOME.”

China trade experts said the moves will only deepen the impasse between Washington and Beijing.

“Everyone knew this was coming,” said Craig Allen, president of the US-China Business Council. “There was no doubt this was coming. The response to it is surprising and disappointing. ”

Stocks finished a volatile trading day sharply in the red Friday, after a selloff driven by the new retaliatory tariffs from China and the President’s criticism of Federal Reserve policy.

Trump again attacked Federal Reserve Chairman Jerome Powell over interest rates, which Trump insists are too high even after a rate cut last month.

“My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” the president tweeted referring to Chinese leader Xi Jinping.

Late Friday night, Trump told reporters he wouldn’t stop Powell if the chairman wanted to resign. </s> Reacting to a new round of Chinese tariffs imposed on U.S. goods, President Donald Trump said Friday, August 23 he “hereby ordered” U.S. companies to “start looking for an alternative to China” – and he pledged to respond formally within hours, USA Today reports.

In a series of tweets posted before he flies to France for the G-7 meeting of world leaders – where the global economy and trade issues will take center stage – Trump blasted China’s latest action and vowed to announce retaliatory moves soon.

Markets plunged Friday as it became clear the trade war between Washington and Beijing was escalating. The Dow Jones Industrial Average was off by more than 500 points in midday trading, following a series of dramatic declines last week.

Trump said he would respond to the latest tariffs “this afternoon.”

“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing our companies HOME and making your products in the USA,” Trump wrote.

“We don’t need China and, frankly, would be far better off without them,” he added.

White House officials did not respond to questions about what actions, specifically, Trump was referring to as pundits opined on social media that the president cannot easily order companies to pursue other markets. His posts came hours after Chinese officials announced in state media they will impose tariffs ranging from 5% to 10% on an additional $75 billion in U.S. goods, further increasing trade tensions. </s> U.S. motorcycle manufacturer Harley-Davidson Inc announced it is shifting some of its American production to the European Union overseas in order to avoid EU’s retaliatory tariffs.

The Milwaukee-based motorcycle manufacturer which was founded in 1903 took the decision after President Donald Trump imposed tariffs on steel and aluminum imports from the European Union and NATO members, provoking a “tit-for-tat” response from the trading bloc against U.S. goods.

Under the new tariffs, imported steel will be taxed at 25 percent. Meanwhile, aluminum will be taxed at a 10 percent.

Harley-Davidson stated that the tariffs on motorcycles rose from 6 percent to 31 percent. This meant each exported motorcycle cost an additional $2,200 for the buyer. 16 percent of the company’s sales are to the European market.

As a result, to avoid the additional costs, the heavyweight U.S. motorcycle manufacturer decided to relocate some of its American production overseas.

Trump’s tariffs harmed the company so much that its shares closed down nearly 6 percent and analysts cut their profit forecasts on concerns about how quickly the company would be able to adapt to the 25 percent import duties the European Union began charging on June 22.

In the beginning of May 2018, economic experts had warned the Trump administration of the adverse effects of the tariffs. Harley-Davidson also released a statement at that time and said they support free trade.

“We support free and fair trade and hope for a quick resolution to this issue. We believe a punitive, retaliatory tariff on Harley-Davidson motorcycles in any of our major markets would have a significant impact on our sales, our dealers, our suppliers and our customers in those markets,” the statement read.

As soon as the company announced its decision to relocate, Trump took to his favorite social media tool Twitter to criticize the move.

However, the president seems to forget that with his tariffs, he is directly hurting the company he once praised.

“In this administration, our allegiance will be to the American workers and to American businesses, like Harley-Davidson, that were very strong in the 1980s and I remember this — you were victims of trading abuse — big trading abuse, where they were dumping all sorts of competitors all over the place,” Trump said to Harley-Davidson executives in February of 2017. “And Ronald Reagan stepped in and he put on large tariffs and you wouldn’t be talking about Harley-Davidson probably right now if he didn’t do that.”

Harley-Davidson has plants in Australia, Thailand, Brazil, India and the United States. The company said it will raise investment in its plants overseas but didn’t reveal details.

In May, the United States set stage for a potential trade war with some of its top allies after the Trump administration ended a two-month exemption by hitting the European Union, Canada and Mexico with steel and aluminum tariffs.

Apart from Harley-Davidson, the largest nail producer is also suffering the latest changes. Since Trump slapped the tariffs, Missouri based-company Mid Continent Nail Corporation lost 50 percent of its business in merely two weeks.

The company said it had to lay off nearly sixty of its temporary workers and also fears an additional 200 workers will have to be laid off.

Trump who often touts about making America great again is doing the complete opposite with his actions. If anything, these tariffs are forecasted to have an adverse impact on the economy. </s> US President Donald Trump says he has "hereby ordered" American companies with operations in China to "immediately" start looking for an alternative after Beijing announced a series of retaliatory tariffs.

But as markets in the US, Asia and Europe tumbled, the White House offered no further details or explanation of Trump's intentions.

Instead, the president tweeted he would be responding to China's tariffs on Friday afternoon.

"This is a GREAT opportunity for the United States," he wrote.

The US has said it plans to impose 10 per cent tariffs on $US300 billion ($A444 billion) of Chinese goods in two steps, on September 1 and December 15.

China responded on Friday with new tariffs on $US75 billion ($A111 billion) of US products in retaliation, deepening a conflict over trade and technology that threatens to tip a weakening global economy into recession.

China also will increase import duties on US-made autos and auto parts, the Finance Ministry announced.

Tariffs of 10 per cent and 5 per cent will take effect on two batches of goods on September 1 and December 15, the ministry said in a statement.

It gave no details of what goods would be affected but the timing matches Trump's planned duty hikes.

The announcement comes as leaders of the Group of 7 major economies prepare to meet in France this weekend.

Washington is pressing Beijing to narrow its trade surplus and roll back plans for government-led creation of global competitors in robotics, electric cars and other technology industries.

"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing ... your companies HOME and making your products in the USA. I will be responding to China's Tariffs this afternoon," Trump tweeted on Friday.

The White House did not immediately respond to questions about what authority the president has to order private companies to change their business practices.
U.S. President Donald Trump states on Twitter that he has "hereby ordered" that U.S. companies find an alternative for manufacturing in China and relocate "HOME."