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Tariff war: Now China hits back US
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IANS | 19 Sep, 2018
The trade war between the US and China got uglier on Tuesday as Beijing
slapped tariffs on American goods worth $60 billion in retaliation to
the additional taxes of $200 billion on Chinese goods by Washington.
According
to the Customs Tariff Commission of the State Council, the tit-for-tat
tariff will come into effect on September 24 when US tariffs also kick
in.
The tariff rates will be levied at 5 and 10 percent, instead
of the previously proposed rates of 5, 10, 20 and 25 percent, the state
media quoted an official statement as saying.
The two largest economies of the world have already levied taxes worth $50 billion on each other's goods.
On
the other hand, the Trump administration on Monday said that duties on
Chinese imports would rise to 25 per cent on January 1, 2019. These will
apply to almost 6,000 items, marking the biggest round of US tariffs so
far, the New York Times reported.
Earlier, the list slated for
tariffs originally included more than 6,000 items, but US officials
later removed about 300 types of items, including smart watches, bicycle
helmets, play pens, high chairs and baby car seats.
Trump said the latest round of tariffs was in response to China's "unfair trade practices".
Trump
showed no sign of backing down from the type of full-blown trade war
between the world's two largest economies that rattled financial
markets, saying he was prepared to "immediately" place tariffs on
another $267 billion worth of imports in case of China taking any
retaliatory measures.
He also warned Beijing against seeking to influence the upcoming US midterm elections.
The
additional tariffs by the US were on top of penalties enacted earlier
in July on $50 billion worth of Chinese goods. Taken together, it means
roughly half of the products that China sells to the US each year will
be hit by American tariffs.
Unlike the first round of tariffs on
Chinese imports, which were intended to minimize the impact on American
consumers, this wave could raise prices on everyday products including
electronics, food, tools and housewares.
Earlier in the day, the
Chinese Commerce Ministry said that "Washington's move will force
Beijing to take countermeasures" and warned that the action would add
more uncertainties to the trade talks.
The Chinese Foreign Ministry said that "what the US has done shows no sincerity and no good faith at all".
"We
have been stressing that talks need to happen on the basis of parity,
equality and good faith to resolve the relevant issues between the two
sides. This is only way out," Ministry's spokesperson Geng Shuang said.
Trump
said while announcing the tariffs: "The tariffs are designed to force
China to change a range of unfair trade practices, including compelling
American companies to surrender their technology in return for access to
the Chinese market.
"We have been very clear about the type of
changes that need to be made... But, so far, China has been unwilling to
change its practices," he said.
After opening lower, the
Shanghai stock market ended the day 1.8 per cent higher, while Tokyo was
up 1.4 per cent and Hong Kong gained 0.6 per cent.
US Treasury
Secretary Steven Mnuchin had invited the Chinese negotiators to
Washington this week to resume talks. But Beijing said that "the US
insistence on imposing tariffs brings new uncertainties" to those
negotiations.
Despite the ongoing spat, White House National
Economic Council Director Larry Kudlow said the US was still willing to
continue its dialogue with China.
European Union's Vice President Valdis Dombrovskis said that the new tariffs will increase downside risks to the world economy.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
84.35
|
82.60 |
UK Pound
|
106.35
|
102.90 |
Euro
|
92.50
|
89.35 |
Japanese
Yen |
55.05 |
53.40 |
As on 12 Oct, 2024 |
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