The US has more than doubled tariffs on $200bn (£153.7bn) worth of Chinese products, in a sharp escalation of the countries’ damaging trade war.
Tariffs on affected Chinese goods have risen to 25% from 10%, and Beijing has vowed to retaliate. China says it “deeply regrets” the move and will have to take “necessary counter-measures.”
It comes as high-level officials from both sides are attempting to salvage a trade deal in Washington. Only recently, the US and China appeared to be close to ending months of trade tensions.
China’s Commerce Ministry confirmed the latest US tariff increase on its website. “It is hoped that the US and the Chinese sides will work together… to resolve existing problems through co-operation and consultation,” it said in a statement.
Tariffs are taxes paid by importers on foreign goods, so the 25% tariff will be paid by American companies who bring Chinese goods into the country. Chinese stock markets rose on Friday, with the Hang Seng index up less than 1% and the Shanghai Composite more than 3% higher.
However, earlier in the week stock markets had fallen after US President Donald Trump flagged the tariff rise on Sunday. The US imposed a 10% tariff on $200bn worth of Chinese products – including fish, handbags, clothing and footwear – last year.
The tariff was due to rise at the start of the year, but the increase was delayed as negotiations advanced. The US-China trade war has weighed on the global economy over the past year and created uncertainty for businesses and consumers.
Even though Mr Trump has downplayed the impact of tariffs on the US economy, the rise is likely to affect some American companies and consumers as firms may pass on some of the cost, analysts said.
Deborah Elms, executive director at the Asian Trade Centre, said: “It’s going to be a big shock to the economy.
“Those are all US companies who are suddenly facing a 25% increase in cost, and then you have to remember that the Chinese are going to retaliate.”
Source: BBC News