The latest tariffs in Donald Trump’s trade war go into effect, with US duties on another $200 billion in Chinese goods and Beijing responding with levies on $60 billion more in American products.
Donald Trump announced the additional tariffs last week, adding to those in May on $50 billion in Chinese imports as he pinned his political hopes to an economic battle with China and US allies such as Canada and the European Union.
The Administration now has placed duties on almost half of China’s products, and Trump has threatened to extend them to all imports if Beijing does not make concessions. The latest tariffs will rise from 10% to 25% on January 1.
China’s total levies on $110 billion in US products cover almost 80% of American imports.
In the wake of Trump’s announcement last week, trade talks were suspended. On Monday, Beijing accused the Administration of committing “trade bullyism” and “attempting to impose its own interests on China through extreme pressure”.
State media reported, “It has brazenly preached unilateralism, protectionism and economic hegemony, making false accusations against many countries and regions, particularly China.”
The Chinese have also postponed defense-related conversations, after American sanctions were imposed last week on Beijing’s military personnel for buying combat aircraft and missile supplies from Russia.
US economists have said the tariffs will cost the US 0.2% in growth, more if Chinese retaliation has an effect. Manufacturers, consumer groups, and many American businesses have criticized the measures, saying they will increase costs of production and thus prices for consumers.
A coalition of more than 80 industry and agricultural groups protested on Monday: “Americans are waking up today to a tax increase on the things they rely on to provide for their families. From furniture to pet food, light bulbs to baby cribs, even groceries and toilet paper will be taxed by these tariffs.”
Chinese State media purchased a four-page advertisement in Iowa’s largest newspaper this week, quoting Davie Stephens, vice president of the American Soybean Association, “As the largest importer of U.S. soybeans, China is a vital and robust market we cannot afford to lose.”
But Trump has shown no sign of stepping back, telling reporters last week:
We’ve taxed them $50 billion — that’s on technology. Now we’ve added another $200 billion. And I hate to say that, but behind that, there’s another $267 billion ready to go on short notice if I want. That totally changes the equation.