You are here
Trump heaps more tariffs on China, still no deal in sight
THE Trump administration slapped tariffs on roughly US$110 billion in Chinese imports on Sunday, marking the latest escalation in a trade war that's inflicting damage across the world economy. China retaliated.
The 15 per cent US duty hit consumer goods ranging from footwear and apparel to home textiles and certain technology products like the Apple Watch. A separate batch of about US$160 billion in Chinese goods - including laptops and cellphones - will be hit with 15 per cent tariffs on Dec 15. President Donald Trump delayed part of the levies to blunt the impact on holiday shopping.
While the Trump administration has dismissed concern about a protracted trade war, business groups are calling for a tariff truce and the resumption of negotiations between the world's two-largest economies.
Face-to-face talks between Chinese and American trade negotiators scheduled for Washington in September are still happening "as of now", Mr Trump told reporters on Friday before going to Camp David, the US presidential retreat.
China has repeatedly decried US pressure tactics, with signs that its officials are girding for a prolonged confrontation. "China's determination to fight against the US economic warmongering has only grown stronger, and its countermeasures more resolute, measured and targeted," according to a commentary by the official Xinhua News Agency after the tariffs kicked in.
On Sunday, the State Council said that China plans to provide more support for its economy, including investing in infrastructure projects and regional development, while maintaining a prudent monetary policy with "reasonably" ample liquidity. It said that the government aimed to better integrate fiscal, financial and monetary policies, deepen capital market reforms and further open up the financial sector.
While Mr Trump has repeatedly said China is paying for his tariffs, many companies and economists say that US importers bear the cost - and some of it is passed on to consumers.
The non-partisan Congressional Budget Office in August projected that by 2020, Mr Trump's tariffs and trade war will reduce the level of real US GDP by about 0.3 per cent and reduce average real household income by US$580. That followed a JPMorgan Chase & Co note to clients estimating that the latest round of tariffs will increase the average cost per US household to US$1,000 a year - up from US$600 for duties enacted last year. That estimate is in the low range because it was based on a duty rate of 10 per cent, before Mr Trump increased it to 15 per cent.
The tariffs are also harming the global economy. The International Monetary Fund in July further reduced its world growth outlook, already the lowest since the financial crisis, amid the uncertainty from the trade conflict.
China's retaliation took effect as at 12.01pm on Sunday in Beijing, with higher tariffs being rolled out in stages on a total of about US$75 billion of US goods. Its target list strikes at the heart of Mr Trump's political support - factories and farms across the midwest and south at a time when the US economy is showing signs of slowing down.
Higher Chinese duties that took effect on Sept 1 include an extra 10 per cent on American pork, beef, and chicken, and various other agricultural goods, while soybeans will get hit with an extra 5 per cent tariff on top of the existing 25 per cent. Starting in mid-December, American wheat, sorghum, and cotton will also get a further 10 per cent tariff. While China imposed a new 5 per cent levy on US crude oil starting from September, there was no new tariff on liquefied natural gas. BLOOMBERG, REUTERS