AILSA CHANG, HOST:
The trade war between the U.S. and China took an ugly turn this afternoon. President Trump said he was a sharply raising tariffs on all Chinese imports. The president also said today that he was ordering all U.S. companies to leave China. The angry exchange between the two countries sent stocks plummeting. For more on this, we're joined by NPR's Jim Zarroli.
Hey, Jim.
JIM ZARROLI, BYLINE: Hi, Ailsa.
CHANG: So tell us more about this latest announcement by the president.
ZARROLI: Well, the president is really upping the ante here. This is an all-out trade war at this point. This - what he did this afternoon involves tariffs on $300 billion worth of Chinese imports that were supposed to take effect next month. Tariffs were supposed to be 10%. Now, any goods that arrive on U.S. shores from China by that date will be taxed at 15%. And he also said the tariffs on another 250 billion in imports will go up in October. And the president made clear this was in response to the announcement by China earlier today that it was raising tariffs on American goods. And China said it was doing that in retaliation for the tariffs that Trump imposed last month.
CHANG: (Laughter).
ZARROLI: So we're really seeing an escalation of the trade war.
CHANG: Yeah.
ZARROLI: And the president also put out a tweet today saying he was ordering all American companies to leave China.
CHANG: Yeah. On that, does the president even have the authority to tell companies to leave China?
ZARROLI: No, he doesn't. I put that question to some trade law experts. They were all pretty emphatic about it. Here was Jennifer Hillman of Georgetown Law Center, who has had a long career in trade.
JENNIFER HILLMAN: The president has no authority to order companies to pull out of China. Those companies have already invested in China for reasons that they chose to go into China. He cannot order them to pull out of China.
ZARROLI: She says the president has some power to block funds flowing into China in certain emergencies. He can't just tell companies that are already there they have to leave.
CHANG: How has the business community reacted to this order by the president?
ZARROLI: Well, a lot of business groups are very unhappy about it. I mean, President Trump has often said or done things that are kind of at odds with the kind of free-market capitalism that's always, you know, defined America.
CHANG: (Laughter).
ZARROLI: He's not afraid to use the office of the presidency to get involved in decisions that companies make. I spoke to David Dollar, who worked in the Obama administration. He says this order today for companies to pull out of China goes further than anything the president has done before.
DAVID DOLLAR: In general, we don't have a system where the government makes all the decisions about production and imports. We have a system where that's left up to households and firms. Basically, these measures are turning our system into a planned economy.
CHANG: President Trump also had some pretty angry words today about the chair of the Fed, Jerome Powell. What was that all about?
ZARROLI: Yeah. I mean, you know, presidents have grumbled about the Fed before. I cannot remember any of them doing what Trump did today, which was calling the Fed chair an enemy. I mean, this went - happened because Powell spoke in Jackson Hole, Wyo., at the annual conference for central bankers. You know, it was a pretty ordinary, even boring speech. He didn't commit to cutting interest rates again, which is something that the president really wants to stimulate the economy. And almost as soon as he finished, Trump tweeted, my only question is, who is our bigger enemy - Jay Powell or Chinese President Xi Jinping? I mean, you know, the president has been attacking Powell for a while. He wants him to cut interest rates more. But this really, I think, just took the kind of attacks that he's been doing to a whole new level. And it's really ironic because after all, you know, Trump appointed Powell as Fed chair.
CHANG: (Laughter) Right. That's NPR's Jim Zarroli.
Thanks, Jim.
ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.
