Beijing/Washington, The trade war between the US and China got uglier on Tuesday as Beijing slapped tariffs on American goods worth $60 billion in retaliation to the additional taxes of $200 billion on Chinese goods by Washington.
According to the Customs Tariff Commission of the State Council, the tit-for-tat tariff will come into effect on September 24 when US tariffs also kick in.
The tariff rates will be levied at 5 and 10 percent, instead of the previously proposed rates of 5, 10, 20 and 25 percent, the state media quoted an official statement as saying.
The two largest economies of the world have already levied taxes worth $50 billion on each other’s goods.
On the other hand, the Trump administration said that duties on Chinese imports would rise to 25 per cent on January 1, 2019. These will apply to almost 6,000 items, marking the biggest round of US tariffs so far, the New York Times reported.
Earlier, the list slated for tariffs originally included more than 6,000 items, but US officials later removed about 300 types of items, including smart watches, bicycle helmets, play pens, high chairs and baby car seats.
Trump said the latest round of tariffs was in response to China’s “unfair trade practices”.
Trump showed no sign of backing down from the type of full-blown trade war between the world’s two largest economies that rattled financial markets, saying he was prepared to “immediately” place tariffs on another $267 billion worth of imports in case of China taking any retaliatory measures.
He also warned Beijing against seeking to influence the upcoming US midterm elections.
The additional tariffs by the US were on top of penalties enacted earlier in July on $50 billion worth of Chinese goods. Taken together, it means roughly half of the products that China sells to the US each year will be hit by American tariffs.
Unlike the first round of tariffs on Chinese imports, which were intended to minimize the impact on American consumers, this wave could raise prices on everyday products including electronics, food, tools and housewares.
Earlier in the day, the Chinese Commerce Ministry said that “Washington’s move will force Beijing to take countermeasures” and warned that the action would add more uncertainties to the trade talks.
The Chinese Foreign Ministry said that “what the US has done shows no sincerity and no good faith at all”.
“We have been stressing that talks need to happen on the basis of parity, equality and good faith to resolve the relevant issues between the two sides. This is only way out,” Ministry’s spokesperson Geng Shuang said.
Trump said while announcing the tariffs: “The tariffs are designed to force China to change a range of unfair trade practices, including compelling American companies to surrender their technology in return for access to the Chinese market.
“We have been very clear about the type of changes that need to be made… But, so far, China has been unwilling to change its practices,” he said.
After opening lower, the Shanghai stock market ended the day 1.8 per cent higher, while Tokyo was up 1.4 per cent and Hong Kong gained 0.6 per cent.
US Treasury Secretary Steven Mnuchin had invited the Chinese negotiators to Washington this week to resume talks. But Beijing said that “the US insistence on imposing tariffs brings new uncertainties” to those negotiations.
Despite the ongoing spat, White House National Economic Council Director Larry Kudlow said the US was still willing to continue its dialogue with China.
European Union’s Vice President Valdis Dombrovskis said that the new tariffs will increase downside risks to the world economy.