U.S. President Donald Trump escalated his trade war with Beijing, imposing 10 percent tariffs on about $200 billion worth of imports in a move one senior Chinese regulator said “poisoned” the atmosphere for negotiations.
Trump also warned in a statement on Monday that if China takes retaliatory action against U.S. farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”
China is reviewing plans to send a delegation to Washington for fresh talks in light of the U.S. decision, the South China Morning Post reported on Tuesday, citing a government source in Beijing, raising the risk of a prolonged trade battle between the world’s largest economies that could hit global growth. U.S. trade actions against China will not work as China has ample fiscal and monetary policy tools to cope with the impact, a senior securities market official said.
Collection of tariffs on the long-anticipated list will start on Sept. 24 but the rate will increase to 25 percent by the end of 2018, allowing U.S. companies some time to adjust their supply chains to alternate countries.
So far, the United States has imposed tariffs on $50 billion worth of Chinese products to pressure Beijing to make sweeping changes to its trade, technology transfer and high-tech industrial subsidy policies. China has retaliated in kind. Vice Premier Liu He was set to convene a meeting in Beijing on Tuesday morning to discuss the government’s response, Bloomberg News reported, citing a person briefed on the matter. China has vowed to retaliate against new U.S. tariffs, with state-run media arguing for an aggressive “counterattack.”
Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai, said three quarters of its members will be hit by the tariffs, and they will not bring jobs back to the United States.
“Most of our member companies are ‘in China, for China’ – selling goods to Chinese companies and consumers, not to Americans – and thus ultimately boosting the U.S. economy,” Jarrett said.