China on Tuesday announced a tariff hike on $60 billion of US products in response to President Donald Trump’s latest duty increase in a dispute over Beijing’s technology policy.
The Trump administration announced the tariffs on some 5,000 Chinese-made goods will start at 10 percent, beginning Monday. They are to rise to 25 per cent on January 1.
China’s move comes even as an American business group warned that a “downward spiral” in their conflict appeared certain following Trump’s penalties on $200 billion of Chinese goods.
The Chinese Finance Ministry said it was going ahead with plans announced in August for the increases of 10 per cent and 5 per cent on 5,207 types of US goods, reported news agency AP. A list released last month included coffee, honey and industrial chemicals.
The increase is aimed at curbing “trade friction” and the “unilateralism and protectionism of the United States,” the ministry said on its website. It appealed for “pragmatic dialogue” to “jointly safeguard the principle of free trade and the multilateral trading system.”
The latest moves mark a new phase in the escalating US-China trade war. The US had earlier imposed tariffs on nearly $50 billion (₹3.6 trillion) on Chinese goods, which China has also matched. Led by US President Donald Trump’s protectionist policies, the punitive trade measures are aimed at pressuring China to halt what it terms “predatory” and “unfair” trading practices. It has also accused China of stealing US technological knowhow from American companies in exchange for allowing access to the vast Chinese market.
India to wait and watch
While India has also been subject to US tariffs of 25% on steel and 10% on aluminium exports, it has reportedly decided to postpone levying its own set of retaliatory tariffs on certain US goods it had planned earlier this year, said a report in Business Insider.
According to an Economic Times report, the US has granted a conditional waiver to India on imposing the steel and aluminium tariffs by exempting a certain percentage of these imports from tariffs.
India has been seeking a complete waiver and had indicated in June that it would in turn impose levies on 29 American goods and products including apples, walnuts and almonds.
However, it now appears, India is keen on averting a trade war with the US and will now evaluate its tariffs plans on US imports in November, the Business Insider report said.
India also recently entered into a strategic partnership with the US, signing a key communications agreement that would help the two countries better coordinate military exercises in the region and gain access to certain US defence technology.
But India is not immune from the consequences of the China and US trade war, which has already battered Asian stock markets with experts worrying about a long-term economic slowdown that could have a domino effect on emerging markets including India. In recent weeks, the Indian stocks markets have remained volatile with the Indian rupee plunging to its worst value compared to the US dollar.
In July, a parliamentary panel in India warned of Chinese exporters dumping products into India with devastating consequences on Indian manufacturers, and a widening trade deficit with China.