U.S., China hike tariffs as trade war intensifies
- Author: Eleanor Harrison Sep 26, 2018,
Sep 26, 2018, 1:57
President Donald Trump's latest round of punitive tariffs on China took effect on Monday, adding US$200 billion in Chinese imports to the escalating trade war that is clouding the global economic horizon.
USA tariffs on $200 billion (€170 billion) worth of Chinese goods and retaliatory duties by Beijing on $60 billion worth of United States products took effect after the weekend.
Trump had warned that the retaliatory duties by Beijing would ignite a fresh round of tariffs on $267 billion worth of Chinese imports, meaning that all Chinese exports to the USA could effectively be subjected to new duties.
Trump threatened last week to add an additional $267 billion in Chinese imports to the target list if Beijing retaliated for the latest U.S. taxes, which would cover almost everything China sells to the US. A news report suggested that China will block any potential negotiations unless United States president Trump withdraws his threats of further tariffs on the country.
Earlier this month, strategists at the Commonwealth Bank of Australia warned the U.S. could eventually apply 25% tariffs on all Chinese imports, totalling over $US500 billion per annum, resulting in a 0.4 percentage point hit to Chinese GDP growth should such an outcome eventuate.
American officials say Chinese plans for state-led development of global competitors in robotics and other technologies violate its market-opening obligations and might erode U.S. industrial leadership.
While Wang and seven other top officials briefing the media on Monday's "white paper" did not say directly that the United States would have to remove all tariffs before any new trade talks, that condition seemed to be implied. "We can say that the risks of a global trade war have risen significantly".
"If this continues, it will destroy in an instant the gains of the last four decades of China-U.S. relations", Wang told members of the U.S.
It's normal for the US and China to have trade disputes, but their common interests are much bigger than the problem areas, according to Fu.
News of Beijing's decision to skip the talks pushed China's yuan currency down 0.3 per cent on Monday in offshore trade, reinforcing investors' fears that both sides are digging in for a long fight. "This is why we believe that the trade war complies neither with the Chinese nor with U.S. trade interests".
Certain forces in the United States have been making groundless criticisms against China about trade and security issues, which has poisoned the atmosphere for Sino-U.S. ties and is highly irresponsible, State Councillor Wang Yi was quoted as saying, without naming anyone.
The statement came a day after the two countries' new tariffs on each other's goods kicked in.
"To improve the ability of companies to adapt, China will further reduce their [social insurance] fees and taxes", Lian said.
Several rounds of talks in recent months have failed to produce a significant breakthrough and fresh negotiations which had been expected in coming weeks have been cancelled after Beijing reportedly decided late last week not to send a delegation to Washington.
"With generic polls favoring the Democrats, they may feel that the trade environment may be less hostile after November 6", said ING's chief Asia economist, Rob Carnell.
Isaac Boltansky, a policy analyst at the research and trading firm Compass Point, said the broadside against China and continued threats of tariffs could trigger a more forceful response from Beijing. Trump has been repeatedly threatening to add duties on remaining imports from its trade partner if it retaliates.