BEIJING (AP) — China announced on Friday that it will increase tariffs on U.S. products from 84% to 125% starting on Saturday, intensifying a new trade war with the escalation of mutually applied tariffs.
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Beijing had said it would combat US rates with its own countermeasures and described Donald Trump’s actions as “economic harassment”, which led the Republican president to retaliate by continuously raising tariffs this week.
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Why are the United States and China in a new trade war?
Trump’s total tariffs on Chile amount to 145%. When he announced on Wednesday that the Asian giant faced tariffs of 125%, he did not include a 20% tariff linked to its role in fentanyl production.
Despite the pause announced by Trump on tariffs from other countries, China was not included, and tariffs continued to increase in a tit-for-tat manner.
“The abnormally high tariff increase by the United States on China has become a numbers game, which has no practical economic significance, and will become a joke in the history of the global economy,” said a spokesperson for the Chinese Ministry of Finance when announcing the new tariffs. “However, if the United States insists on continuing to substantially infringe upon the interests of our country, China will counterattack with determination and fight to the end.”
The Chinese Ministry of Commerce said it would file another lawsuit with the World Trade Organization (WTO) against Donald Trump’s tariffs.
Last week, Beijing suspended imports of sorghum, poultry, and bone meal from certain US companies, and imposed more export controls on rare earth minerals, critical for various technologies, as well as including a few dozen US companies on lists that would prevent Chinese companies from selling them dual-use products.
Given the size of the two economies, the world’s largest, experts fear a global economic chaos.
The Director-General of the WTO, Ngozi Okonjo-Iweala, said earlier this week that the trade war between Washington and Beijing could “seriously damage global economic prospects.”