Tit-for-tat, it’s raining tariffs, US-China trade war rages on

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Chennai, September 19: China retaliates against US tariff imposition, by imposing a tariff on $60 billion worth of US goods, late evening on Tuesday, September 18.

When the global economic market was still reeling from the impact of the US introducing heavy tariffs on $200 billion worth of Chinese goods, China reciprocated the move and announced similar tariffs on $60 billion worth of US goods.

The US tariffs start at a rate of 10%, before rising to 25% by the end of the year. They come into effect on September 24, and will apply to thousands of Chinese products, ranging from food seasonings and baseball gloves to network routers and industrial machinery parts.

China’s new tariffs will be levied at rates of 5% or 10%, depending on the product, from the same date, the Chinese government said.

More than 5,000 US goods will be affected, including meat, nuts, alcoholic drinks, chemicals, clothes, machinery, furniture and auto parts.
The new tariffs announced by Washington and Beijing this week “mark a major escalation of their conflict that will hit global economic growth,” Louis Kuijs, head of Asia Economics at research firm Oxford Economics, said in a note.

 

The clash between the world’s two top economies is already hurting companies on both sides of the Pacific. The latest US move means, roughly half of the products that China sells to the United States each year will be hit by American tariffs.

President Donald Trump on Tuesday defended the latest trade move against Beijing.

“We’re doing a very good job with China,” Trump said in the Oval Office. “China has been taking advantage of the United States for a long time and that’s not happening anymore.”, cited a CNN report.

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The Trump administration is trying to pressure Beijing to change its behavior, accusing it of overseeing the theft of US intellectual property and boosting Chinese companies through aggressive industrial policies. The Chinese government dismisses the criticism as groundless, even though American and European firms operating in China frequently complain about the issues.

The White House issued a warning on Monday that it would respond to any retaliation from Beijing with yet more tariffs on roughly $267 billion of Chinese exports. That would mean the US measures effectively cover all the goods China sells to the United States each year (the total for 2017 was about $506 billion).

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Analysts have suggested that after Beijing runs out of US goods to target, it could go after major American companies that do business in China, such as Apple and Boeing. China has a track record of such behavior, including making life difficult for South Korean firms because of a political dispute last year with South Korea’s government over a US missile defense system.

A CNN report stated, “The principal objective of the US tariffs is probably not to bring Beijing to the bargaining table,” Arthur Kroeber, a senior analyst at research firm Gavekal said in a note Tuesday. “Rather, it is to force US multinational companies to pull back their investments in China, so that the interdependence of the two rival economies is reduced.”

-by Nandini Paul