US hikes tariffs on Chinese goods amidst fresh trade talks
10 May 2019
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The United States today raised tariffs on some 5,700 product categories imported from China, worth more than $200 billion, alleging that China reneged on its agreement to review rules that essentially hurt US exports to that country.
The new tariffs that took effect at 12:01 am Washington time on Friday raise US import duties on select Chinese products from 10 per cent to 25 per cent, deepening a conflict that has roiled markets and cast a shadow over the global economy.
US President Donald Trump had on Sunday said he would raise tariffs on $200 billion worth of Chinese goods from 10 to 25 per cent by Friday with Beijing reneging on its agreement to review trade policies.
US officials have said the new duties - introduced on just five days notice - will not apply to goods already on transit and headed for American shores. A 25 per cent tariff is already in place on a further $50 billion in imports from China.
Although March trade figures showed that US goods trade deficit with China decreased 16.2 per cent to an unadjusted $20.7 billion, the lowest level since March 2014, there was still a $28.3 billion trade deficit with China.
Overall US imports from China fell 6.1 per cent while its exports to China jumped 23.6 per cent in March, which showed President Trump’s “America First” policy is gaining ground.
China said in a statement it is forced to retaliate, but did not specify how.
Meanwhile discussions between Xi Jinping’s top trade envoy and his US counterparts in Washington made little progress on Thursday. While the negotiations were due to resume today morning Washington time, sources said there are little chances of an immediate solution.
Ahead of the talks on Thursday, Trump also said the US would go ahead with preparations to impose 25 per cent tariffs on a further $325 billion in goods from China, raising the prospect of all of China’s goods exports to the US - which were worth about $540 billion last year - being subject to new import duties.
Trump calmed US financial markets after he insisted it was still possible to reach a deal this week, even as he reiterated plans to raise tariffs on Chinese goods. Trump, speaking at an event in Washington, also said he may hold a phone call with his Chinese counterpart, Xi, although no call between the two leaders had taken place till late Thursday.
“He just wrote me a beautiful letter, I just received it, and I’ll probably speak to him by phone, but look, we have two great alternatives, our country is doing fantastically well. Our alternative is an excellent one, it’s an alternative I have spoken about for years. We have taken well over $100 billion from China in a year,” Trump said.
