Deepening a trade battle and sending financial markets into a tailspin, China announced Monday it was raising tariffs on $60bn of US goods in retaliation for the latest hike in US tariffs on its exports.
The move comes after the United States escalated a bitter trade war with a tariff hike on $200bn of Chinese products.
China will impose tariffs on a total of 5,140 US products from June 1, the ministry said in a statement.
“China’s adjustment on additional tariffs is a response to US unilateralism and protectionism,” the ministry said. “China hopes the US will get back to the right track of bilateral trade and economic consultations and meet with China halfway.”
The retaliatory measures were announced about an hour after US President Donald Trump tweeted directly to Chinese President Xi Jinping saying: “China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries.
Markets immediately slumped with the Dow and S&P down more than 2 percent. The tech heavy Nasdaq dropped 2.5 percent.
China’s finance ministry said the new penalty duties of 5 percent to 25 percent will affect thousands of US products – including batteries, spinach and coffee.
That followed Trump’s increase on Friday of duties on $200bn of Chinese imports from 10 percent to 25 percent after alleging that China backtracked on commitments it made in earlier negotiations in a dispute over Beijing’s technology ambitions and perennial trade surplus.
On Monday, the US president tweeted to Xi that China “had a great deal, almost completed, & you backed out!”
Shockwaves
The new tariffs are likely to hurt exporters on both sides, as well as European and Asian companies that trade between the United States and China or supply components and raw materials to their manufacturers.
The increases already in place have disrupted trade in goods from soybeans to medical equipment and sent shockwaves through other Asian economies that supply Chinese factories.
Forecasters have warned the US tariff hikes could disrupt a Chinese recovery that had appeared to be gaining traction. Growth in the world’s second-largest economy held steady at 6.4 percent over a year earlier in January-March, supported by higher government spending and bank lending.
The tensions “raise fresh doubts about this recovery path”, Morgan Stanley economists Robin Xing, Jenny Zheng and Zhipeng Cai said in a report.
The latest US charges could knock 0.5 percentage points off annual Chinese economic growth and that loss could widen to 1 percentage point if both sides extend penalties to all of each other’s exports, economists say. That would pull annual growth below 6 percent, raising the risk of politically dangerous job losses.
The latest China-US talks ended with no word of progress on Friday.
Trump might meet his Chinese counterpart, Xi Jinping, during next month’s meeting of the Group of 20 major economies in Osaka, Japan, his economic adviser said on Sunday.
from Trendy Newses http://bit.ly/2HiaKGU
0 Comments