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China will levy an additional 50 per cent tariff on US goods on top of 34 per cent already announced, a tit-for-tat retaliation against US President Donald Trump’s tariffs in the escalating trade war between the world’s two largest economies.
The Office of the Customs Tariff Commission of China’s State Council said the new tariffs would take effect after midday in Beijing on Thursday and were in response to an additional 50 percentage point punitive charge Washington levied on China on Wednesday.
The across-the-board tariffs, which will take additional levies being charged on all US goods from Thursday to 84 per cent, will hit American exports of machinery, semiconductors, agriculture and other goods.
The total tariffs charged by China on US goods would be more than 100 per cent once Thursday’s levies came into effect, economists said. A large portion of US farm, energy and other exports were also affected by separate additional tariffs imposed earlier.
“The US’s practice of escalating tariffs on China is a mistake on top of a mistake, which seriously infringes on China’s legitimate rights and interests and seriously damages the rules-based multilateral trading system,” the State Council tariffs office said.
China’s President Xi Jinping’s tough line on Trump’s tariff war will disappoint US and Chinese business leaders, who had hoped the two sides might negotiate to defuse the growing dispute.
People familiar with the communications between Beijing and Washington said there had been no talks between them about resolving the trade war.
Unlike other countries in Asia, including Japan, South Korea and Vietnam, China has not contacted the Trump administration to start negotiations. Meanwhile, the Trump administration has not approached Beijing about holding talks.
The White House did not immediately respond to a request for comment
Some economists said there was still hope Beijing and Washington could pull back and negotiate once the damage from the trade war became clear.
“They’re like two prize fighters in the ring and we’re on round one and they’re flexing their muscles and each of them still feels fairly fresh,” said Fred Neumann, chief Asia economist at HSBC. “But come round seven, eight or nine, both sides will exhaust themselves and I think will start to look for the referee.”
Beijing also on Wednesday added an additional 12 US companies to its export control list and six American groups to its “unreliable entity” list, potentially limiting their ability to continue sourcing goods from China or doing business in the country.
The groups added to the export blacklist include laser optics maker American Photonics, laser and medical device group Novotech and Boeing drone subsidiary Insitu. The companies added to the unreliable entity list were mainly drone makers and other defence contractors.
Chad Bown, a senior economist at the Peterson Institute for International Economics, said total duties on Chinese goods would be more than the 104 per cent introduced by Donald Trump since the start of his second term because the US had an average tariff of 21 per cent in place before he entered the White House in January.
“The average US tariffs on China will be somewhere north of 100 per cent. That is a really, really high tariff,” said Bown.
China on Wednesday afternoon also released a government white paper that said it was willing to “communicate” with the US, but which reiterated the need for countermeasures in response to Trump’s tariffs.
The European Union Chamber of Commerce in China said in a statement on the US tariffs that the US was “rolling back on many of the principles that have underpinned its approach to global trade and investment” and that “China has the chance to establish a business environment that can provide the stability and reliability that investors require”.
The trade war comes at a difficult time for Xi, who has been leaning on exports to steer the economy through a domestic slowdown driven by a property crisis.
