The US escalated a tariff war with China on Friday by hiking levies on $200 billion worth of Chinese goods amid last-ditch talks to rescue a trade deal, as President Donald Trump signalled that talks could drag on beyond this week.
In a series of early-morning tweets on Friday, Trump defended his decision to raise tariffs, saying there was no need to rush into a deal and adding that the American economy would be boosted more by the levies than by an eventual deal.
But even as Beijing threatened retaliation, negotiators agreed to stay at the table in Washington for a second day, keeping alive hopes of an agreement that would remove a major threat to the global economy. Trump, who has adopted protectionist policies as part of his ”America First” agenda, issued orders for the tariff increase, saying China “broke the deal” by reneging on earlier commitments made during months of negotiations.
China’s Commerce Ministry said it would take countermeasures, without elaborating.
Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume efforts on Friday to rescue a deal that could end a 10-month trade war between the world’s two largest economies.
The Commerce Ministry said negotiations were continuing and that it “hopes the US can meet China halfway, make joint efforts, and resolve the issue through cooperation and consultation.”
With negotiations in progress, US Customs and Border Protection imposed a 25 per cent duty on more than 5,700 categories of products leaving China after 12:01 a.m. EDT on Friday.
Seaborne cargoes shipped from China before midnight were not subject to the new tax as long as they arrived in the US prior to June 1. Those cargoes will be charged the original 10 per cent rate.
“This delay might create an unofficial window during which the US and China can continue to negotiate,” investment bank Goldman Sachs wrote in a note, adding that it was a “somewhat positive sign” that talks were continuing.
Trump gave US importers less than five days’ notice about his decision to increase the rate on the $200 billion category of goods.