The Trump administration will impose a 10 percent tariff on about $200 billion in Chinese goods next week and more than double the rate in 2019, deepening what’s shaping up to be a prolonged trade war between the world’s two biggest economies.
If Beijing retaliates against U.S. farmers and industry — as it has previously vowed — the U.S. will immediately pursue further tariffs on about $267 billion of Chinese imports, President Donald Trump said in a statement Monday.
Vice Premier Liu He, President Xi Jinping’s top economic adviser, is set to convene a meeting in Beijing on Tuesday morning to discuss the government’s response, according to a person briefed on the matter. On a panel at meetings of the World Economic Forum in Tianjin, Fang Xinghai, vice chairman of China’s Securities Regulatory Commission, said China won’t be pressured by Trump’s trade tactics and talked up the economy’s strength.
While he estimated a negative hit to China’s GDP growth of about 0.7 percentage points if the U.S. goes ahead with tariffs on all China exports to the U.S., Fang also said he’s confident that relations between both countries can normalize and said he hopes both sides can negotiate on an equal basis.
Reaction in Chinese financial markets was muted. The Shanghai Composite Index was little changed after closing at its lowest level in almost four years on Monday. The yuan slipped and S&P futures were lower.
China has previously said it would retaliate against the $200 billion round of tariffs by imposing duties on $60 billion of U.S. goods ranging from liquefied natural gas to aircraft.
The Trump administration is giving American businesses a chance to adjust and look for alternative supply chains by delaying an increase of the tariff to 25 percent on Jan. 1 for the $200 billion batch of Chinese goods, according to two senior administration officials who briefed reporters on Monday. The 10 percent tariff will take effect on Sept. 24.
“For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies,” Trump said. “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices.”
Bloomberg