Monday, September 27, 2021
Array

U.S. escalates trade war amid negotiations, China says will hit back

Must read

- Advertisement -

The United States on Friday escalated a tariff war with China by hiking levies to 25 per cent for 200 billion dollars worth of Chinese goods in the midst of last-ditch talks to rescue a trade deal.

However, even as Beijing threatened retaliation, negotiators in Washington agreed to stay at the table for a second day, keeping alive hopes of an eventual agreement.

U.S. President Donald Trump, who has adopted protectionist policies as part of his “America First” agenda, issued orders for the tariff increase, saying China had “broken the deal” by reneging on commitments made during months of negotiations.

Trump also said he would start the “paperwork” for 25 per cent duties on another 325 billion dollars in Chinese imports.

In Beijing, China’s commerce ministry said it “deeply regrets” the U.S. decision, adding that it would take necessary countermeasures, without elaborating.

Chinese Vice-Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday.

They were expected to resume efforts on Friday to rescue a deal that could end a 10-month trade war between the world’s two largest economies.

The commerce ministry said negotiations were continuing and that it “hopes the U.S. can meet China halfway, make joint efforts and resolve the issue through cooperation and consultation”.

With negotiations in progress and no action from the Trump administration to reverse the increase, U.S. Customs and Border Protection imposed the new 25 per cent duty on over 5,700 categories of products leaving China after 12:01 a.m. (0401 GMT) on Friday.

The Office of the U.S. Trade Representative separately said seaborne cargoes shipped from China before midnight was not subject to the new tax as long as they arrive in the U.S. prior to June 1.

Those cargoes will be charged the original 10 per cent rate.

The grace period was not applied to three previous rounds of tariffs imposed in 2018 on Chinese goods, which had much longer notice periods of no less than three weeks before the duties took effect.

“This delay might create an unofficial window during which the U.S. and China can continue to negotiate,” investment bank Goldman Sachs wrote in a note.

It added that it was a “somewhat positive sign” that talks were continuing.

Trump gave U.S. importers less than five days notice about his decision to increase the rate on the 200 billion dollars category of goods to 25 per cent, which now matches the rate on a prior 50 billion dollars category of Chinese machinery and technology goods.

U.S. stock futures fell and Asian shares pared gains after the U.S. went ahead with its threatened tariff hike, reflecting investors’ worries that a protracted trade war would hit global economic growth.

Reuters/NAN

- Advertisement -

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest article

- Advertisement -
cosgrove