US, China increase tariffs as trade war intensifies

The United States and China have imposed new tariff hikes on each other's goods, giving no sign of compromise in an intensifying trade war that is weighing on global economic growth.

US regulators went ahead with a planned 10 percent tax on a $200 billion list of 5,745 Chinese imports including bicycles, furniture and other consumer goods.  

China's customs agency said it responded at noon Monday by beginning to collect taxes of 5 or 10 percent on a $60 billion list of 5,207 American goods, from industrial chemicals to honey.

The two sides had already imposed 25 percent penalties on $50 billion of each other's goods in the summer.

US President Donald Trump threatened last week to add $267 billion in Chinese imports to the target list if Beijing retaliated for the latest US taxes. That would cover nearly everything China sells to the United States.

China’s imports of American goods last year totaled $153.9 billion while the United States bought Chinese goods worth $429.8 billion, according to Chinese customs data. Monday's tariff increase leaves Beijing with about $40 billion of US goods for penalties while Washington has about $267 billion.

US officials say Chinese plans for state-led development in industries like robotics and other technologies have led to a massive trade surplus with the US and might erode US technological leadership.

Monday's tariff hike follows a report by The Wall Street Journal that Chinese officials pulled out of a meeting to discuss possible talks proposed by Washington. Envoys last met August 22 in Washington but reported no progress.

On Monday, the ratings agency Fitch cut its forecasts for next year's Chinese and global economic growth by 0.1 percentage points to 6.1 percent and 3.1 percent, respectively.

"The trade war is now a reality," said Fitch's chief economist, Brian Coulton, in a report. "The downside risks to our global growth forecasts have also increased."

In a report released on Monday, the Chinese government accused the Trump administration of "trade bullyism" and of preaching "economic hegemony."

SS