China and the United States plunged deeper into a trade war on Tuesday after Beijing added $60 billion of US products to its import tariff list in retaliation for President Donald Trump’s planned levies on $200 billion worth of Chinese goods, reports Reuters.
The tit-for-tat measures are the latest escalation in an increasingly protracted trade dispute between the world’s two largest economies.
On Monday, the US administration said it will begin to levy new tariffs of 10 percent on about $200 billion of Chinese products on September 24, with the tariffs to go up to 25 percent by the end of 2018.
Beijing will impose levies on a total of 5,207 US products - ranging from liquefied natural gas to certain types of aircraft as well as cocoa powder and frozen vegetables - at 5 and 10 percent, instead of previously proposed rates of 5, 10, 20 and 25 percent, the finance ministry said.
Both countries’ tariffs come into force on September 24.
So far, the United States has imposed tariffs on $50 billion worth of Chinese products to pressure China to make sweeping changes to its trade, technology transfer and high-tech industrial subsidy policies.
Beijing has retaliated in kind, but some analysts and American businesses are concerned it could resort to other measures such as pressuring US companies operating in China.
Trump warned on Monday that if China takes retaliatory action against US farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”
A senior Chinese securities market official said US trade actions will fail as China has ample fiscal and monetary policy tools to cope with the impact. The government has already been ramping up spending on infrastructure.
Trump’s latest escalation of tariffs on China comes after several rounds of talks yielded no progress. US Treasury Secretary Steven Mnuchin last week invited top Chinese officials to discussions.
In light of the US action, China is reviewing plans to send a delegation to Washington for new talks, the South China Morning Post reported on Tuesday, citing a government source in Beijing.
The European Union trade chief said the tariff issues between the two should be resolved through the World Trade Organization. The EU and the United States have declared a truce in their own trade dispute while they negotiate.
“Trade wars are not good and they are not easy to win, and this escalation is of course very unfortunate,” European Trade Commissioner Cecilia Malmstrom told reporters, echoing one of Trump’s catch phrases that trade wars were easy to win.