US, China Exchange New Round of Tariffs in Trade War

Alicia Cross
September 26, 2018

United States tariffs on $200bn worth of Chinese goods and retaliatory taxes by Beijing on $60bn worth of USA products kicked in on Monday as the trade dispute between the world's two biggest economies escalated, unnerving global financial markets.

US Treasury Secretary Steven Mnuchin had invited Chinese officials to hold new talks, but President Donald Trump's latest salvo - and warnings that another $267 billion of goods are being lined up - appear to have scuttled that effort.

The U.S. has already imposed tariffs on $50 billion worth of Chinese goods, and China has retaliated on an equal amount on U.S. goods.

But Trump has taken an increasingly hard line on trade around the world, with $200 billion (R2 863 300 000 000,00) in tariffs on Chinese exports set to take effect on Monday. One of the reasons that China made a decision to cut off talks, according to reports, was the US State Department's crackdown on China's defense agency for purchasing goods from a sanctioned Russian arms exporter.

Several senior Chinese officials attending the press conference reiterated other points in the policy paper, stressing the chaos on global trade caused by Trump's trade war and rebutting his claims of China enjoying unfair trade advantages over the US.

Bloomberg reported that the China Daily, Beijing's official English newspaper, paid for a four-page advertising supplement on Sunday in the Des Moines Register - the largest newspaper in the politically important state of Iowa - that highlighted the impact of the trade war on soybean farmers.

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China and the United States imposed new tariff hikes on each other's goods Monday and Beijing accused Washington of bullying, giving no sign of compromise in an intensifying battle over technology that is weighing on global economic growth. Business groups say American companies also report Chinese regulators are starting to disrupt their operations through slower customs clearance and more environmental and other inspections.

"With generic polls favoring the Democrats, they may feel that the trade environment may be less hostile after November 6", said ING's chief Asia economist, Rob Carnell.

"The US-China trade war has no clear end in sight".

The trade war between the United States and China has escalated in recent days, and the likelihood of a near-term solution is quickly fading.

China targeted 5,200 United States goods with 5 to 10 percent tariffs, including big-ticket items such as liquefied natural gas, lumber and electronics, as well as peppermint oil, pig hides and condoms. Monday's tariff hike follows a Wall Street Journal report that Chinese officials pulled out of a meeting to discuss possible talks proposed by Washington; envoys last met August 22 in DC but reported no progress.

"We believe the vast majority of companies will remain in China and deepen their development", he said.

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