China announced on Friday it will hit United States imports worth $75 billion with new tariffs as retaliation for Washington’s planned tariff hikes, further intensifying the pair’s bruising trade war.
The punitive tariffs of 5 to 10 per cent will apply to 5,078 items from the US, starting September 1 and December 15, China’s state council tariff office said.
Beijing also announced it will impose a 25pc tariff on US autos and a 5pc tariff on auto parts, also starting December 15.
The escalating trade war between the world’s two largest economies is adding to growing fears of a possible recession in the US, with the tariffs weighing on global trade and both countries’ growth.
US President Donald Trump has imposed steep tariffs on $250 billion in Chinese goods, with a further $300 billion in imports targeted for new duties in two more rounds, September 1 and December 15.
Meanwhile, China has hit back with duties on around $110 billion of US goods — or nearly all of the $120 billion worth of American goods it imported last year. Some of those goods will now likely have their tariff rates raised even further.
The tariff hikes by the US “have led to the continuous escalation of China-US economic and trade frictions, violating the consensus reached by the two heads of state in Argentina and the consensus reached in Osaka”, China’s State Council Tariff Commission Office said in a statement.
“China’s adoption of punitive tariff measures is forced under the pressure of US unilateralism and trade protectionism,” the office said.
‘The chosen one’
China had lifted punitive tariffs on American cars and auto parts earlier this year as a goodwill measure while trade talks were underway.
The Dow Futures, which give a strong indication of the opening of the Dow Jones index on Wall Street, were in the green before the China announcement but plunged into the red before the official opening of the stock exchange.
Trump proclaimed himself “the Chosen One” on Wednesday as he defended his trade war against China, indicating that it was his destiny to take on Beijing.
An alarm bell went off in the US Treasury bond market last week when 10-year bond yields briefly fell below the yields offered on a two-year bond — the inverse of what normally happens.
US officials have said in recent days that trade talks with China will continue face-to-face next month.
However, China’s commerce ministry spokesman Gao Feng said on Thursday he had no information on the next round of meetings, while noting the two sides remain in contact.
The two economic giants are squaring off in an increasing number of areas with officials and spokespeople taking daily shots at each other over trade, territorial disputes in the South China Sea, protests in Hong Kong and US actions against Chinese tech giant Huawei.