US and China impost new tariffs as trade war escalates
The US and China have gone ahead with their latest tariff increases on each other’s goods, raising prices people pay for some clothes, shoes, sporting goods and other consumer items.
The 15% US increases apply to about £92 billion of Chinese imports, and it is consumers who will bear the brunt of the costs.
More than two-thirds of the consumer goods the US imports from China now face higher taxes.
The administration had largely avoided hitting consumer items in its earlier rounds of tariff hikes.
But with prices of many retail goods now likely to rise, the administration’s move threatens the US economy’s main driver: consumer spending.
As businesses pull back on investment spending and exports slow in the face of weak global growth, American shoppers have been a key bright spot for the economy.
As a result of President Donald Trump’s higher tariffs, many US companies have warned they will be forced to pass on to their customers the higher prices they will pay on Chinese imports.
In China, authorities began charging higher duties on American imports at midday on Sunday, according to employees at customs offices in Beijing and the southern port of Guangzhou.
Tariffs of 10% and 5% apply to items ranging from frozen sweet corn and pork liver to marble and bicycle tyres, the government announced earlier.
After Sunday’s tariff hike, 87% of textiles and clothing the US buys from China and 52% of shoes will be subject to import taxes.
On December 15, the Trump administration is scheduled to impose a second round of 15% tariffs - this time on roughly £131 billion of imports.
If those duties take effect, virtually all goods imported from China will be covered.
The Chinese government has released a list of American imports targeted for penalties on December 15 if the US tariff hikes take effect.
Beijing said Sunday’s penalties and the planned December increases will apply to around £61 billion of American goods.
Washington and Beijing are locked in a war over US complaints that China steals US trade secrets and unfairly subsidises its own companies in its drive to develop global competitors in such high-tech industries as artificial intelligence and electric cars.
To try to force Beijing to reform its trade practices, the Trump administration has imposed import taxes on billions of dollars’ worth of Chinese imports, and China has retaliated with tariffs on US exports.
Mr Trump has insisted that China itself pays the tariffs.
But in fact, economic research has concluded that the costs of the duties fall on US businesses and consumers.
Mr Trump had indirectly acknowledged the tariffs’ impact by delaying some of the duties until December 15, after holiday goods are already on store shelves.
A study by JP Morgan found Mr Trump’s tariffs will cost the average US household 1,000 dollars (£822) a year.
That study was done before Mr Trump raised the September 1 and December 15 tariffs to 15% from 10%.
The president has also announced that existing 25% tariffs on a separate group of around £205 billion of Chinese imports will increase to 30% on October 1.