Trade war: US set to hit China with new wave of tariffs

Business and Consumer Services

The US is due to impose fresh tariffs on a range of Chinese goods, in a sharp escalation of a bruising trade war.

On Sunday, the US is expected to hit billions of dollars worth of Chinese products with 15% duties, in the first of two rounds of new tariffs.

Beijing said it has “ample” means to retaliate, while also calling for both sides to continue trade negotiations.

The move comes amid heightened tensions between Washington and Beijing.

By the end of the year, Washington aims to impose tariffs on almost all Chinese imports into the US.

What was initially a dispute over China’s allegedly unfair trade practices is increasingly seen as a geopolitical power struggle between the world’s two largest economies.

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So far, Washington has imposed tariffs on some $250bn of Chinese goods, while Beijing has retaliated with tariffs on $110bn of US products.

Businesses are finding it increasingly hard to navigate the uncertainty of the long-running trade dispute.

Analysts say that in view of the latest escalation, the prospect of a resolution looks grim.

“It’s difficult at this stage to see how there can be a deal or at least a good deal,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

“Since talks broke down back in May, the position of both sides has hardened and there have been other complications, namely the Huawei ban and Hong Kong protests, which have made it even more difficult to bridge the gap.”

The US government put Huawei on a trade blacklist in May, while US President Donald Trump has tied protests in Hong Kong to a possible trade deal with China.

What is expected on 1 September?

The US is due to impose a 15% tariff on $300bn worth of Chinese goods by the end of the year in two rounds.

The first round of duties is due to be introduced on 1 September and analysts expect those tariffs will target imports worth about $150bn.

The Office of the United States Trade Representative would not clarify the value of goods due to be hit with tariffs this month.

Products to be targeted in September range from meat and cheese to pens and musical instruments.

The second wave of goods, subject to new duties from 15 December, includes clothing and footwear.

The 15% rate supersedes the 10% originally planned and was announced last week as tensions between the two sides escalated.

China initially said it would retaliate with measures targeting $75bn of US goods, but later appeared to soften those comments.

On Thursday, Commerce Ministry spokesperson Gao Feng said China had “ample” means to retaliate against planned US tariffs while emphasising the need to de-escalate tensions.

“The most important thing at the moment is to create necessary conditions for both sides to continue negotiations,” he said in a briefing, according to Reuters.

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