The trade war between the U.S. and China took a turn for the worse on Friday as the Trump administration increased tariffs on $200 billion worth of Chinese goods. Tariffs on 5,700 categories of goods increased from 10% to 25% at 12.01 am on Friday.
The tariffs went into effect just hours before U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice-Premier Liu He held a second day of talks in Washington on Friday. The session ended after about 90 minutes.
“They were constructive discussions,” Mr. Mnuchin told reporters as he left Mr. Lighthizer’s offices near midday. Mr. Mnuchin said the negotiations were done for the day.
Mr. Liu, the lead Chinese negotiator, told reporters at his hotel in Washington that the talks had gone “fairly well”.
Things have moved quickly over the past few days with tariffs kicking in days after Mr. Trump said they would, and five days after the administration notified the new rates in the Federal Register. This, despite Mr. Trump saying on Thursday that Chinese President Xi Jinping had sent him a “very beautiful letter” offering to “work together” and “get something done”.
The tariff rate on machinery and technology imports from China, whose value is about $50 billion, was already hiked to 25% last year in tit-for-tat tariff rounds between the two countries. Friday’s tariffs for the $200 worth of Chinese imports, “as part of the U.S.’s continuing response to China’s theft of American intellectual property and forced transfer of American technology,” was set to kick in January 1 as per a September 2018 announcement from the USTR, but it was held in abeyance as negotiations continued.
In the past, Mr. Trump had threatened to increase tariffs on the remainder of Chinese imports as well, a threat he reiterated on Friday. The U.S. imported $558 billion of goods from China as per the USTR, with $250 billion attracting 25% tariffs as of Friday.
In the past, Mr. Trump had threatened to increase tariffs on the remainder of Chinese imports as well, a threat he reiterated on Friday. The U.S. imported $558 billion of goods from China as per the USTR, with $250 billion attracting 25% tariffs as of Friday.
New round
“The process has begun to place additional tariffs at 25% on the remaining $325 billion,” Mr. Trump wrote on Twitter.
Last week, U.S. officials familiar with the discussions had said China had backtracked on commitments, prompting Mr. Trump’s decision to impose the new round of tariffs.
China has said, via a Ministry of Commerce statement, that it “deeply regretted” the latest tariff development and has said it will take countermeasures.
American agriculture has felt much of the heat of the tit-for-tat trade war with China. Mr. Trump sought to assuage concerns on Friday. With an election looming in 2020, the President cannot afford to alienate farmers — most of the top 10 agricultural States were won by Mr. Trump in 2016. “Your all time favourite President got tired of waiting for China to help out and start buying from our FARMERS, the greatest anywhere in the World!” he wrote on Twitter.
Tariff increases will also mean U.S. firms paying more for Chinese inputs and those costs will be, at least in partially, passed on to American consumers.
0 comments:
Post a Comment