US President Donald Trump has said that he would impose a fresh 10 per cent tariff on another $300 billion of Chinese goods that will take effect September 1, in a sharp escalation of a trade war between the two countries.
“Trade talks are continuing, and during the talks the US will start, on September 1, putting a small additional tariff of 10 per cent on the remaining $300 billion of goods and products coming from China into our Country. This does not include the $250 billion already tariffed at 25 per cent.”
The new tariffs will effectively tax all Chinese imports to the US. The duty is likely target a wide range of goods, from smartphones to clothing.
The announcement comes after a team led by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spent Tuesday and Wednesday negotiating in Shanghai with a high-level Chinese delegation headed by Vice Premier Liu He.
According to the White House, the latest round of trade talks did not result in an agreement, but the negotiations were positive.
On Friday however, China’s Foreign Minister Wang Yi slammed Trump’s decision to impose the additional tariff, the BBC reported.
“Adding tariffs is definitely not a constructive way to resolve economic and trade frictions, it’s not the correct way,” Wang said on the sidelines of a meeting of South East Asian ministers in Bangkok.
The move jolted financial markets. On Wall Street, the Dow Jones share index closed down 1.1 per cemt, and Asia markets were sharply lower on Friday. Oil prices also tumbled.
The US Chamber of Commerce, which represents more than three million US companies, said the latest tariffs on China “will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong US economy”.
It urged the two sides to remove all tariffs.
Over the past year, China and the US have imposed tariffs on billions of dollars of one another’s goods.
In May, Trump increased from 10 per cent to 25 per cent a tariff on Chinese imports worth $200 billion. China retaliated by slapping tariffs on US imports worth $60 billion.
Trump later threatened to impose tariffs of up to 25 per cent on another $325 billion of Chinese imports, causing concern in financial markets and the business community due to the possible effect on consumer spending, which accounts for about two-thirds of the US economic activity.
Despite several rounds of talks, the world’s two largest economies have failed to reach an agreement to end the trade war which has rattled investors and cast a shadow over the global economy.