China to impose new tariffs on US imports

In this file photo taken on 30 July, 2019, Chinese Vice Premier Liu He (C), US Trade Representative Robert Lighthizer (R) and Treasury Secretary Steve Mnuchin pose for photos before holding talks at the Xijiao Conference Center in Shanghai. (AFP Photo)

China announced Friday it will hit United States (US) soybeans, lobsters, peanut butter and other imports worth US$75 billion with new tariffs in retaliation for Washington's planned duty hikes, further intensifying the bruising trade war between the world's top two economies.

The punitive tariffs of five to 10 percent will apply to 5,078 items from the US, starting 1 September and 15 December, China's state council tariff office said.

Beijing also announced it will reimpose a 25 percent tariff on US autos and a five percent tariff on auto parts, also starting 15 December. China had lifted those tariffs earlier this year as a goodwill measure while trade talks were underway.

The escalating trade war is adding to growing fears of a possible recession in the US, with the tariffs weighing on global trade and both countries' growth.

US President Donald Trump has imposed steep tariffs on US$250 billion in Chinese goods, with a further US$300 billion in imports targeted for new duties in two more rounds, 1 September and 15 December. 

Meanwhile China has hit back with duties on around US$110 billion of US goods – or nearly all of the US$120 billion worth of American goods it imported last year.

Some of those goods will now have their tariff rates raised even further.

China's commerce ministry said it will hit American frozen lobster, frozen chicken feet, peanut butter and 914 other goods with new 10 percent punitive tariffs starting 1 September. 

Soybeans, crude oil and other energy goods face five percent tariffs. 

The US actions "have led to the continuous escalation of China-US economic and trade frictions, violating the consensus reached by the two heads of state in Argentina and the consensus reached in Osaka," China's State Council Tariff Commission Office said in a statement.

"China's adoption of punitive tariff measures is forced under the pressure of US unilateralism and trade protectionism," the office said.

US-made mango juice, electric buses and chemical products face 10 percent duties come mid-December while smaller aircraft, hand pumps and bearings will be hit with five percent taxes.  

'The chosen one'

Wall Street stocks opened lower Friday after Beijing's announcement.

Also on Friday, Federal Reserve Chair Jerome Powell warned that trade tensions were exacerbating the global slowdown and the Fed didn't have a "rulebook" for dealing with the fallout.

Those comments came after Trump proclaimed himself "the Chosen One" Wednesday as he defended his trade war against China, indicating that it was his destiny to take on Beijing.

An alarm bell went off in the US Treasury bond market last week when 10-year bond yields briefly fell below the yields offered on a two-year bond – the inverse of what normally happens.

US officials have said in recent days that trade talks with China will continue face-to-face next month.

However, China's commerce ministry spokesman Gao Feng said Thursday he had no information on the next round of meetings, while noting the two sides remain in contact.

The two economic giants are squaring off in an increasing number of areas with officials and spokespeople taking daily shots at each other over trade, territorial disputes in the South China Sea, protests in Hong Kong and US actions against Chinese tech giant Huawei. - AFP