The trade rivalry between the U.S. and China escalated to an unprecedented level on Tuesday, with both countries announcing new tariffs on imports from each other.
The U.S. has announced 10% tariff on $200 billion of imports from China, whose retaliatory tariffs between 5% and 10% will apply to $60 billion of imports from the U.S. The new tariffs on both sides will go into effect on September 24.
Rates to go up
With the new announcements, U.S. tariffs will apply to $250 billion of Chinese goods and Chinese tariffs will apply to $110 billion of U.S. goods. The rate of the new tariffs will be raised to 25% by the end of 2018, the U.S. administration has said.
Around 5,000 American items are expected to face the new measures, including aircraft, soya bean oil, smoked beef, coffee and flour, according to a provisional list released last month.
The Chinese Ministry of Commerce said in a statement that Washington’s decision to levy fresh tariffs was “deeply regrettable.” “We deeply regret the decision. China will be forced to take synchronous counter-measures to safeguard our legitimate rights ... as well as the global free trade order,” a spokesperson said.
With President Donald Trump threatening to impose tariffs on all Chinese imports and Beijing appearing ready to retaliate, the two largest economies might be hurtling towards a prolonged trade war that could impact the world economy.
China’s Vice-Premier Liu He may cancel his visit to the U.S. capital next week to restart negotiations with Treasury Secretary Steven Mnuchin, the South China Morning Post reported. China is “out of bullets” to retaliate, as its exports to the U.S. is worth four times its imports from the U.S, U.S. Commerce Secretary Wilbur Ross told a TV show on Tuesday morning.
