Markets LIVE: US hikes tariffs amid trade talks; China vows
Article by: Fin24 Team
The US hiked tariffs on more than $200 billion in goods from China on Friday in the most dramatic step yet of President Donald Trump’s push to extract trade concessions.
US hikes tariffs amid trade talks; China vows to retaliate
Shawn Donnan, Jennifer Jacobs and Kevin Hamlin, Bloomberg
The US hiked tariffs on more than $200 billion in goods from China on Friday in the most dramatic step yet of President Donald Trump’s push to extract trade concessions, deepening a conflict that has roiled financial markets and cast a shadow over the global economy.
China immediately said in a statement it is forced to retaliate, though it hasn’t specified how. The 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.
The negotiations were due to resume on Friday morning Washington time. Asian stocks swung in a volatile session and US futures dropped. Ahead of the talks on Thursday, Trump also said the US would go ahead with preparations to impose 25% tariffs on a further $325 billion in goods from China, raising the prospect of all of China’s goods exports to the US – which were worth about $540 billion last year – being subject to new import duties.
Such a move would take weeks to deploy. But it would have significant repercussions for the US, Chinese and global economies.
Economists at Moody’s Analytics said in a report this week that an all-out trade conflagration between the world’s two-largest economies risked tipping the US economy into recession by the end of 2020 just as voters go to the polls in the US.
The move “exacerbates the uncertainty in the global trading environment, further raises tensions between the US and China, negatively affects global sentiment and adds to risk aversion globally,” said Michael Taylor, managing director for credit strategy and standards at Moody’s Investors Service in Hong Kong.
The new tariffs that took effect at 12:01 a.m. Washington time Friday raise from 10% to 25% the duties on more than 5 700 different product categories from China – ranging from cooked vegetables to Christmas lights and highchairs for babies. US officials have said the new duties – introduced on just five days’ notice – will not apply to goods already on boats headed for American shores.
A 25% tariff is already in place on a further $50 billion in imports from China.
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