Washington/Beijing, May 10 (IANS) US President Trump escalated his trade war with China on Friday, raising tariffs on $200 billion worth of Chinese goods from 10 per cent to 25 per cent, prompting a swift rebuke from Beijing as trade talks held in Washington failed to produce a breakthrough.
Trump said he was in “absolutely no rush” to finalize the trade agreement with China and that bilateral talks, due to resume in Washington later on Friday, were continuing in a very “congenial” way.
Tariffs on the targeted exports increased to 25 per cent at 12.01 a.m. on Friday.
In response, China expressed “deep regret over the development” and said it would respond in kind. The Ministry did not give specifics on how it would respond.
The Chinese Commerce Ministry in a statement said that Beijing will have to take necessary countermeasures after the latest tariff hike.
“China deeply regrets that it will have to take necessary countermeasures. The 11th round of China-US high-level economic and trade consultations is underway.
“It is hoped that the US and the Chinese side will work together and work together to resolve existing problems through cooperation and consultation,” the statement added.
A high-level Chinese delegation led by its top trade envoy and the country’s Vice Premier Liu He was in Washington to hammer out a deal to put an end to the trade war. The delegation met the US negotiators on Thursday but failed to produce an agreement. The two-day talks will end on Friday.
Under the current circumstances, Liu said he “hopes to engage in rational and candid exchanges with the US side,” according to China’s state news agency. He added that raising tariffs was not a solution to the problems.
“Talks with China continue in a very congenial manner – there is absolutely no need to rush – as tariffs are now being paid to the US by China of 25% on 250 billion dollars worth of goods and products. These massive payments go directly to the Treasury of the US,” the US President tweeted on Friday.
Apart from raising tariffs on $200 billion worth of Chinese imports, Trump said a process had begun to place the full 25 per cent duty on a further $325 billion worth of Chinese goods.
Chinese stock markets rose on Friday, with the Hang Seng index up less than 1 per cent and the Shanghai Composite more than 3 per cent higher. Benchmark indexes in Europe posted gains of less than 1 per cent in early trade. But US stock futures were lower.
Analysts say the tariff hikes could hit growth in both economies and drag down global growth.
The world’s two largest economies had agreed on a 90-day truce in December last year after slapping tariffs on each other’s goods.
Trump temporarily extended the deadline late February citing “positive progress” in talks with Beijing. This meant that the US would not hike new tariffs on Chinese imports.
On Sunday however, Trump caught the Chinese off guard by announcing to hike levies which would go into force from Friday.
Beijing and Washington have been locked in a bruising trade war since July last year after Trump slapped an additional 25 per cent on an initial $50 billion worth of Chinese goods.
Trump followed it through with another 10 per cent on an additional $200 billion in products in September.
The Chinese hit back at the US by raising levies on American products worth $150 billion.
It is the levies imposed in September last year by Trump which have been increased to 25 per cent from Friday.