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May 10, 2019

China poised to retaliate after US ups trade war ante with new tariffs

The US has taken further action in its on-going trade war with China and market watchers are now waiting to see what responsive measures Chinese authorities will take.

By Leonie Barrie

China looks set to retaliate after the US imposed higher tariffs on US$200bn worth of Chinese goods, as threatened by President Trump earlier this week.

Despite on-going trade talks in Washington, the US has carried through with its threat to impose higher levies on an additional list of Chinese exports, with tariffs due to rise from 10% to 25% today (10 May).

News agency Bloomberg reported China said it will be forced to retaliate without saying how, but on previous occasions when the US had hiked tariffs China had done likewise.

China’s ministry of commerce said in a statement: “The Chinese side deeply regrets that it will have to take necessary countermeasures.” 

The latest move came after discussions between President Xi Jinping’s top trade envoy and his US counterparts in Washington made little progress on Thursday, with the mood around them downbeat, according to people familiar with the talks, Bloomberg reported.

The negotiations, involving Chinese vice premier Liu He and US Trade Representative Robert Lighthizer, are due to resume on Friday morning Washington time.

Trump has also threatened that the US would go ahead with plans to impose 25% tariffs on a further $325bn of goods from China, effectively hitting all Chinese products exported to the US.

Food items, including fish and cooked vegetables, will be impacted by the latest tariff hike but the biggest hit will be taken by non-food categories such as telecommunications equipment and computer circuit boards.

The increased tariffs apply only to goods leaving China after the deadline and will go into effect only once shipments reach the US.

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