United States tariffs on US$200 billion worth of Chinese goods and retaliatory taxes by Beijing on US$60 billion worth of USA products including liquefied natural gas (LNG) kicked in on Monday (Sept 24) as the trade dispute between the world's two biggest economies escalated, unnerving global financial markets.
The U.S. and China implemented another round of tariffs on billions of dollars' worth of one another's goods on Monday, which has the potential to raise U.S. prices on some common consumer items.
China's finance ministry said last week it would activate tariffs of five to 10 percent on 5,200 categories of United States goods totalling $60 billion.
The Chinese tariffs are a response to President Donald Trump's strategy to pressure Chinese companies to adjust trade practice which he says are damaging US businesses.
His latest attack means that the U.S. is collecting import levies on $250 billion of Chinese goods.
China doesn't appear to be backing down from its ongoing trade war with the U.S. But the latest round of mutual tariffs shows the country is going to have to look for new avenues if it wants to keep up the fight.
In a paper published today the Chinese government argued that America "has..." The two nations had already slapped tariffs on $50 billion worth of each other's goods earlier this year.
China yesterday accused the United States of using false accusations on trade to "intimidate" other countries, as the tariff battle between the global giants intensifies.
"The trade war is now a reality", said Fitch economist Brian Coulton.
The Commonwealth Bank of Australia expects the U.S. will eventually apply 25% on tariffs on all Chinese imports beginning either late this year or early 2019.
The two are also at odds over Beijing's wooing of Taiwan's diplomatic allies, treatment of religious groups and claims to disputed islands in the South China Sea.
America has defended its policy, saying it is responding to Chinese state backing if its industries, which goes against global trade rules.
Rivals and allies, including India, China, Russia, Japan, Turkey and the European Union, have all dismissed that claim, regarding the USA tariffs as "safeguards" under the WTO rules, entitling them to a combined $3.5 billion in annual compensation. There's a growing consensus in Beijing that substantive talks will only be possible after USA mid-term elections in November, the people said.
Beijing's plans to cut costs for exporters and recently announced a plan to reduce taxes exporters have to pay.
"Protectionist US trade policies have now reached the point where they are materially affecting what remains a strong global growth outlook", the agency said in a report Friday.
China imports far less from the United States, making a dollar-for-dollar match on any new USA tariffs impossible.
Among the USA items expected to be hardest hit, according to an analysis from the Trade News Centre, are printed circuit boards, desktop computers, computer parts and metal and wooden furniture.