Trade War: US Hits China With New Wave Of Tariffs

The US has imposed fresh tariffs on $112bn (£92bn) of Chinese imported goods. It marks a sharp escalation of the bruising trade war between the world’s two largest economies.

Trade War

The move is the first phase of US President Donald Trump’s latest plan to place 15% duties on $300bn of Chinese imports by the end of the year.

Beijing says it has “ample” means to retaliate, while also calling for both sides to continue trade negotiations.

Businesses are finding it increasingly hard to navigate the uncertainty of the long-running trade dispute.

Analysts say that in view of the latest escalation, the prospect of a resolution looks grim.

The US government put Huawei on a trade blacklist in May, while President Trump has tied protests in Hong Kong to a possible trade deal with China.

What is expected on 1 September?

The US is due to impose a 15% tariff on $300bn worth of Chinese goods by the end of the year in two rounds.

The first round of duties is due to be introduced on 1 September and analysts expect those tariffs will target imports worth about $150bn.

The Office of the United States Trade Representative would not clarify the value of goods due to be hit with tariffs this month.

How do they differ from previous tariffs?

It’s the American consumer who will bear the brunt of these fresh tariffs, unlike previous rounds which have hit the manufacturing sector hardest.

Nappies, dishwashers, shoes, clothes, food – looking through the 122-page list of eligible products, it’s hard to find something that’s not on there.

And that could add up to $800 to the average household’s annual spend, according to Katheryn Russ from the University of California.

How has industry reacted?

Mr Trump has repeatedly argued that China pays for tariffs, but many US companies have rebutted that claim.

More than 200 footwear firms – including Nike and Converse – said the new duties would add to existing tariffs of up to 67% on some shoes, driving up costs for consumers by $4bn each year.

“Our members have long been clear that tariffs are paid by consumers and harm business,” it said in a statement.

“We urge… that both sides work towards a sustainable agreement as soon as possible that resolves the fundamental, structural issues foreign businesses have long faced in China.”

What’s next?

From 15 December, the second phase of 15% tariffs will be rolled out on the remainder of Chinese good not previously affected.

This includes technology like phones and computers which President Trump has sought to protect until now.

“The impact on China would be larger, as much as 5%.”

From 15 December, the second phase of 15% tariffs will be rolled out on the remainder of Chinese good not previously affected.

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