A spokesperson for the US government says US customs will start collecting a 104 percent levy on Chinese imports today, multiple media outlets have reported. China’s Commerce Ministry has also vowed to escalate its retaliation on US imports – calling US President Donald Trump’s decision to hike an initial 54 percent cumulative rate by another 50 percent “a mistake upon a mistake.”
Trump’s so-called reciprocal tariffs on 86 trade partners are expected to come into force at midday in Macao (12:01 am Wednesday Eastern Time in the US). The initial rates ranged between 10 percent and 50 percent, though Trump purported to be “doing very well” in early negotiations to lower the rates with almost 70 countries, CNBC said.
On Tuesday, White House Press Secretary Karoline Leavitt claimed countries and regions that had “chosen to retaliate and try to double down on their mistreatment of American workers” had made “a mistake.” Her remarks came after China announced it would impose a 34 percent tariff rate on all US imports from 10 April.
[See more: China calls on the nation to weather the tariff storm]
On Tuesday, an editorial from China’s Xinhua news agency described Washington’s behaviour as “naked extortion” and logically “absurd”. It added that China was prepared to “respond in kind” and would not bend to threats. “Washington’s stance reflects a dangerous form of economic bullying that runs counter to the principles of sovereign equality and mutual respect,” the editorial read.
Wen-ti Sung, a non-resident fellow with the Atlantic Council’s Global China Hub, told the Guardian that China and the US were “locked in a game of chicken.” He said: “Beijing will not let Washington get to call the shots, lest it sets the tone for the years to come.”
After taking office earlier this year, Trump imposed a 10 percent tariff rate on Chinese imports, claiming the country wasn’t doing enough to stop the flow of fentanyl across its borders and into the US, fuelling a deadly synthetic opioid crisis. The rate later rose to 20 percent.
[See more: US tariffs will not have a big impact on Macao’s trade, local business leaders say]
Then came last week’s announcement of across-the-board reciprocal tariffs, including an additional rate of 34 percent for Chinese imports – bringing the total to 54 percent. The extra 50 percent, announced by the US on Friday, was in response to Beijing’s retaliatory measures.
Trump has justified his steep, sweeping tariff hikes as a means of countering his country’s trade partners’ own allegedly unfair trade policies, which Trump has quantified – in part – based on the size of the US’ trade deficit with each. He has argued that increasing the cost of imports in the US would encourage domestic manufacturing, spur local consumers to buy more American-made goods, and increase the amount of investment in the country.
However, analysts have warned that an all-out trade war between China and the US could push the rest of the world into a recession, given that the two countries account for around 43 percent of the global economy.
