President Donald Trump’s latest tariff hike on Chinese goods took effect on Friday and Beijing said it would retaliate, escalating a battle over China’s technology ambitions and other trade strains.
- US increases tariffs on $200 billion of Chinese goods
- China said it will retaliate but did not immediately give details
- The two countries are holding last-ditch trade talks in Washington
The Trump administration raised duties on $200 billion of Chinese imports from 10 per cent to 25 per cent.
The increase went ahead after American and Chinese negotiators began more talks in Washington aimed at ending a dispute that has disrupted billions of dollars in trade and shaken global financial markets.
American officials accuse Beijing of backtracking on commitments made in earlier rounds of negotiations.
The talks were due to resume on Friday after wrapping up with no word on progress.
China’s Commerce Ministry said it “deeply regrets” the US decision, adding that it would take necessary countermeasures, without elaborating.
Shares in Asia were mixed on Friday amid renewed investor jitters about the possible impact of the trade battle on global economic growth.
Michael Taylor, managing director and chief credit officer for Asia-Pacific at Moody’s Investors Service, said the US move exacerbated uncertainty in global trade, added to US-China tensions, and negatively affected global sentiment.
“The higher tariffs could also lead globally to the repricing of risk assets, tighter financing conditions and slower growth,” Mr Taylor said.
Chinese and US negotiators are trying to work out a deal after the US raised further tariffs. (Reuters: Stringer)
Escalation looms as tensions rise
Mr Trump said last Sunday that he might extend penalties to all Chinese goods shipped to the United States.
Beijing retaliated for previous tariff hikes by raising duties on $110 billion of American imports. But regulators are running out of US goods for penalties due to the lopsided trade balance.
Chinese officials have targeted operations of American companies in China by slowing customs clearance for their goods and stepping up regulatory scrutiny that can hamper operations.
The higher US import taxes do not apply to Chinese goods shipped before Friday. By sea, shipments across the Pacific take about three weeks, which gives negotiators a few more days to reach a settlement before importers may have to pay the increased charges.
The negotiators met on Thursday evening. Then, after briefing Mr Trump on the negotiations, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin dined with the leader of the Chinese delegation, Vice Premier Liu He.
Mr Liu, speaking to Chinese state TV on his arrival in Washington, said he “came with sincerity”, and appealed to Washington to avoid more tariff hikes, saying they are “not a solution”.
“We should not hurt innocent people,” Liu told CCTV.
At the White House, Mr Trump said he had received “a beautiful letter” from Chinese President Xi Jinping and would “probably speak to him by phone”.
The two countries are sparring over US allegations that China steals technology and pressures American companies into handing over trade secrets, part of an aggressive campaign to turn Chinese companies into world leaders in robotics, electric cars and other advanced industries.
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