China hikes tariffs on USA imports

US Secretary of State Mike Pompeo delivers remarks at the 2018 Values Voters Summit in Washington DC

US Secretary of State Mike Pompeo delivers remarks at the 2018 Values Voters Summit in Washington DC

Defiant in the face of increasing fears about the impact to the USA economy, Mr Trump has threatened to go after 100 per cent of imports from China if the country refuses to change policies he says harm U.S. industry, particularly the theft of American technology.

At a conference Tuesday, the Chinese Vice Minister of Commerce - Wang Shouwen - said negotiations with the USA depend on the willingness of the White House.

China's retaliatory levies target 5,200 USA goods worth $60 billion with new five to 10 percent tariffs, including big ticket items such as liquefied natural gas, lumber and electronics, as well as peppermint oil, pig hides and condoms.

The US will levy tariffs of 10 per cent initially, rising to 25 per cent at the end of 2018.

As China called off planned trade talks with US officials, the latest round of retaliatory tariffs went into effect on Monday.

The conflict stems from USA complaints Beijing steals or pressures foreign companies to hand over technology.

President Trump, who has accused Beijing of exploiting the United States on trade, wants to reduce China's $375.6 billion goods trade surplus with America. It dampened hopes for progress toward a settlement of their war over Beijing's technology policy.

Terming Washington's actions "bullying", Beijing quickly responded that it would retaliate with penalties of the same scale on American goods - and it spelled out details to impose tariffs on 545 U.S. exports, including farm products, autos and seafood, according to the Xinhua state news agency.

The trade war between the United States and China has escalated in recent days, and the likelihood of a near-term solution is quickly fading. "If this continues, it will destroy in an instant the gains of the last four decades of China-US relations".

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Several rounds of talks in recent months have failed to produce a significant breakthrough and fresh negotiations which had been expected in coming weeks have been cancelled after Beijing reportedly decided late last week not to send a delegation to Washington. Companies on both sides of the Pacific are already reporting disruptions to their operations and are reviewing investment plans.

However, he added that given the current divide between the two sides, the risk of a trade war is "rising".

China summoned the USA ambassador in Beijing and postponed military talks in protest against a U.S. decision to sanction a Chinese military agency and its director for buying Russian fighter jets and a missile system.

"The trade war is now a reality", said Fitch's chief economist, Brian Coulton, in a report.

"But the USA side turned the tables, abandoned those agreements and slapped restrictive trade measures [on Chinese imports], making it impossible to proceed with further talks".

Analysts believe that China may be waiting for USA mid-term elections early next month for any hints of changes in Washington's policy stance.

"With generic polls favouring the Democrats, they may feel that the trade environment will be less hostile after November 6".

USA representatives there included Blackstone Group LP (BX.N) co-founder and Chief Executive Stephen Schwarzman and Mastercard Inc (MA.N) Chief Executive Ajay Banga, the National Committee on United States-China Relations said on its website. Beijing has repeatedly denied the charge. China's customs agency said it responded at noon by beginning to collect taxes of 5 or 10 per cent on a $60 billion list of 5,207 American goods, from honey to industrial chemicals. Instead, it has warned of "qualitative" measures to retaliate.

Certain forces in the United States have been making groundless criticisms against China about trade and security issues, which has poisoned the atmosphere for Sino-U.S. ties and is highly irresponsible, State Councillor Wang Yi was quoted as saying, without naming anyone.

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