Tensions have escalated as the US plans to raise tariffs on $200bn (£154bn) worth of Chinese imports
The ongoing trade tensions between China and the US entered a new stage after the US Trade Representative’s office filed paperwork to raise tariffs on $200bn (£154bn) worth of Chinese imports on Friday.
A document filed by the office and signed by Joseph Barloon, general counsel to the Trade Representative, states that the tariff will rise from 10 per cent to 25 per cent on a list of thousands of China-made consumer and industrial products.
The 10 per cent tariff was placed on the same products in September 2018, when trade disagreements between Washington and Beijing began to escalate.
A notice published on the Federal Register also notes that a process is in place to exclude certain products from additional tariffs.
Thousands of goods are affected by this latest move, and will become more expensive for US companies to import.
These include: frozen yams, frog legs, seaweed, rays and skates (fresh or chilled) fresh figs, tobacco, gypsum, metal oxides, brake fluid, printing ink, bidets and lavatory pans, metal tubes, glass, tyres, sewing machines, baskets, wool, hats, metal wire, furniture and buttons.
What will happen next?
The Chinese vice premier Liu He is currently travelling to the US for two days of trade talks; with the latest tariff hike scheduled for midnight EDT on Friday, the changes will arrive in the middle of his trip.
Disagreements between US and Chinese officials have deepened over the past week over accusations that Beijing would renege on commitments made earlier in negotiations that aimed to end the two countries’ trade war.
Reuters reports that on Friday China deleted its previous commitments to change laws in response to many core US complaints, including the potential theft of American intellectual property and trade secrets, in each of the draft trade deal’s seven chapters.
President Donald Trump said that Chinese officials were mistaken if they hope to renegotiate tariffs at a later date with a Democratic administration.
“The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats,” he tweeted.
China’s Commerce Ministry said that Liu, who will lead trade talks for Beijing, will spend only two days in Washington.
Though they opened lower, US stocks recovered slightly after the White House Press Secretary, Sarah Sanders, told reporters that China had given “indications” that its delegation would seek a deal.
David Madden, a market analyst at CMC Markets, said that Europe’s equity markets would be “largely mixed” while the trade war was “hanging over the markets”.
“Even though stocks are well-off their recent multi-month highs, some dealers are fearful the worst is still to come,” he added.