Trump says he will raise tariff rates on Chinese goods in furious rant as trade war escalates

President announces response after stock market plunges by more than 600 points

Donald Trump has increased tariffs against China in the latest escalation of his trade war, following his furious outbursts at Beijing’s earlier decision to impose its own duties on $75bn of American goods.

The US president said taxes on $250bn worth of Chinese imports would be raised from 25 per cent to 30 per cent from 1 October.

Planned tariffs on another $300bn worth of Chinese goods, which are due to come into effect between 1 September and 15 December, will also be raised from 10 per cent to 15 per cent.

The announcement, which came five hours after Mr Trump “ordered” US companies to withdraw from China, began with a complaint that the US lost “hundreds of billions of dollars” to China each year.

“Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer,” he wrote.

“As President, I can no longer allow this to happen! In the spirit of achieving Fair Trade, we must Balance this very unfair Trading Relationship.

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

The escalating trade war unnerved investors, with the US stock market dropping 623 points on Friday.

However Mr Trump brushed off concerns about the fall in the Dow by joking it was prompted by the withdrawal of Seth Moulton from the 2020 presidential campaign.

Companies and business groups have urged the US and China to continue negotiations to end the trade war.

“We do not want to see a further deterioration of US-China relations,” said the US Chamber of Commerce in a statement. ”We urge the administration and the government of China to return to the negotiating table to complete an agreement that addresses concerns over technology transfer practices, intellectual property enforcement, market access, and the globally damaging impact of Chinese domestic subsidies.”

Earlier on Friday Mr Trump had accused the Federal Reserve chairman Jerome Powell – his own appointment - of being a “bigger enemy” to the US than China’s president Xi Jinping.

He went on to claim that the US would be “far better off” without China, adding: “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.”

However the National Retail Federation, the largest retail trade group in the US, said it would be “unrealistic” to withdraw from the world’s second largest economy.

Additional reporting by AP