US, China raise tariffs in new round of trade dispute

US, China raise tariffs in new round of trade dispute

US, China raise tariffs in new round of trade dispute

The United States and China - the world's two largest economies - are escalating their trade war by implementing 25 per cent tariffs on $16 billion U.S. worth of each other's goods, even as mid-level officials from both sides resumed talks in Washington.

China has pledged to strike back at 650 different United States exports including hybrid electric and off road vehicles, dump trucks, asphalt, MRI machines and motorcycles, among other items on Thursday.

The two sides went ahead with the second bout of tariff against each other even as their officials held talks in Washington to find a way out amid the increasing pessimism over an impending solution to end the trade dispute.

U.S. Treasury officials have been working on a revised list of American demands in the lead-up to this week's meetings, according to people familiar with the U.S. preparations.

Washington appears to believe it is winning the trade war as China's economy slows and its stock markets tumble.

US President Donald Trump initiated the trade spat in July in an effort to punish China for what he says were unfair trade practices, such as stealing intellectual property. The US president said any resolution would "take time because China's done too well for too long, and they've become spoiled".

In a brief statement on Friday, the Chinese commerce ministry said both sides had a "constructive" and "candid" exchange over trade issues, and will stay in touch on the next steps.

Some commentators also struck a note of caution for China in taking tit-for-tat approach.

Beijing criticised the USA increase as a violation of World Trade Organisation rules and said it would file a new complaint to the body.

Trump has threatened to impose tariffs on a total of 550 billion dollars' worth of Chinese goods.

Ahead of the Washington talks, Chinese state TV mocked Trump with a sarcastic video posted on YouTube and other social media pages of its worldwide arm, China Global Television Network.

"The risk that current trade tensions escalate further with adverse effects on confidence, asset prices and investment is the greatest near-term risk to global growth", International Monetary Fund chief economist Maury Obstfeld told a news conference last month.

They have assumed a direct impact on China's economic growth in 2018 of 0.1 to 0.3 percentage point, and somewhat less for the United States, but the impact will be bigger next year, along with collateral damage for other countries and companies tied into China's global supply chains.

But a pessimistic Mr Trump yesterday claimed the talks would make no real progress, saying: "I don't anticipate much".

Trump's hard line has rattled Beijing and spurred rate criticism within the highest levels of China's ruling Communist Party over its handling of the trade war, sources have said.

"Here we are three months later and if anything during that time the hawk's position has been consolidated because we drove over the cliff and discovered our auto can fly with the USA economy still doing fairly well and President Trump still popular among Republicans", said Scott Kennedy, an expert on U.S.

Foreign Ministry spokesman Lu Kang would not reveal any details of the talks during a daily news briefing.

China exported goods worth $505.5bn to the United States in 2007, compared with $129.9bn of American goods sent to China.

This is the second salvo in the countries' trade war, after last month Washington imposed tariffs on 34 billion dollars' worth of Chinese goods, with Beijing retaliating with duties on the same amount of U.S. products.

The initial list of USA demands presented to China in May included a call for a US$200 billion reduction in America's annual goods trade deficit with China by 2020 - which stood at about US$375 billion previous year - and an end to industrial policies that the USA claims violates global trading rules.

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