China has vowed to retaliate against President Donald Trump’s latest tariffs of $200 billion of goods coming to the United States from the country.
The WSJ reported that the Asian giant plans to hit back at the Trump administration by imposing new trade tariffs on $60 billion of goods coming from the US. This means that more than 85% of American goods entering China shall be subjected to a levy.
Trump imposed new tariffs on $200 billion of Chinese products on Monday, and promised to impose a further $267 billion in levies if the country retaliates. According to the President, the tariffs are aimed at giving American domestic goods a competitive advantage over foreign imports.
Close to 6,000 Chinese items including electronics, foods, housewares and luggage are expected to be affected by Trump’s latest move. This is also the biggest round of trade tariffs that his administration has imposed on China. The levies will start at 10% and jump to 25% from January 1, unless the two economies come to a consensus.
On Tuesday, the Chinese Ministry of Commerce said it had no option but to retaliate with rates ranging from 5% to 10%. Its new tariffs are set to start on September 24, the same day that Trump’s latest levies will take effect.
The penalties have been placed on many imports from the U.S. including chemicals and products, as well as machinery. Trump took to Twitter early Tuesday accusing Chinese authorities of trying to impact US election by attacking his support base.
The president tweeted, “China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me. What China does not understand is that these people are great patriots and fully understand that China has been taking advantage of the United States on Trade for many years. They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”
The US has imposed levies on $50 billion worth of items coming from China to pressure the country to make extensive changes to its trade policy. American businesses and economists are already raising concern that the ongoing trade war between the two countries could make it extremely difficult for U.S. companies to operate in China.
American companies based in China say that they have experienced an increase in nontariff barriers as the trade war between the two economies escalates. Some US companies have already reported facing barriers such as slower customs clearance in China.
Now that Beijing has hit back, it remains to be seen how the President will respond. China has attempted to win South Korea, Germany, and France and other governments as allies against the U.S. However, most of them are also very critical of Chinese trade policies, despite criticizing America’s tactics.