A trade war between the world’s two largest economies is escalating again after the United States hit China with higher tariffs and Beijing vowed to retaliate.
The Trump administration raised tariffs on $200 billion worth of Chinese imports from 10% to 25% at 12:01 a.m. ET on Friday, according to China’s Ministry of Commerce. Beijing responded just minutes after the tariffs went into effect.
“China expresses deep regret over the development and will have to take necessary countermeasures,” the Ministry of Commerce said in a statement Friday afternoon. “We hope the United States will meet us halfway, and work with us to resolve existing issues through cooperation and consultation.
“Reactions in Asia markets were mixed. Having started the day in positive territory, Japan’s Nikkei Index fell nearly 1% in afternoon trading. The Shanghai Composite Index rose more than 2% and Hong Kong’s Hang Seng Index was up around 1%.
A Chinese delegation led by Beijing’s top trade negotiator Vice Premier Liu He arrived in Washington on Thursday for the latest round of trade talks. Under the current circumstances, Liu said he “hopes to engage in rational and candid exchanges with the US side,” Chinese state media outlet Xinhua reported. Liu added that China believes raising tariffs is not a solution to the problems and is harmful to China, to the United States and to the whole world. Trump’s surprise moves to increase tariffs startled US businesses.
Importers received just five days’ notice about the sudden rise in penalties.”The tariff increase inflicts significant harm on US industry, farmers and consumers,” said Jacob Parker, vice president of the US-China Business Council, a trade group that represents American companies’ interests in China.”It will decrease the competitiveness of American companies, reduce the efficiency of their global supply chains, and reverberate through the US economy. Pure and simple, this is a tax on the American consumer,” he added.
The American Apparel and Footwear Association estimated that a 25% tariff on apparel imports would increase costs for a family of four by $500 a year.
The higher tariffs will be applied to relevant US-bound goods exported from China on or after Friday, according to a notice from the US Federal Register. Talks between the two sides will resume in Washington on Friday, hours after the tariffs took effect.
Credit: CNN
