The ongoing trade war between China and USA escalated on 23 August when US President Donald Trump announced tariff hikes on effectively all Chinese imports into the USA.
The USA would begin the process of raising 25% tariffs on around US$250bn worth of Chinese imports to 30% from 1 October, following a notice and comment period, according to the United States Trade Representative (USTR) office.
Fresh tariffs on an additional US$300bn of Chinese goods, announced earlier on 1 August, would now be at a rate of 15% instead of 10%. The first batch of those tariffs would be introduced in September, the USTR added.
The US moves follow China’s announcement on 23 August that it would hit US soyabeans, lobsters, peanut butter and other imports worth US$75bn with new tariffs and hikes to existing duties.
The tariffs of 5-10% would apply to 5,078 items, starting on 1 September and 15 December, AFP reported.
China’s commerce ministry said it would hit American frozen lobster, frozen chicken feet, peanut butter and 914 other goods with new 10% punitive tariffs starting 1 September. Soyabeans, crude oil and other energy goods faced 5% tariffs.
US Federal Reserve Chair Jerome Powell warned that trade tensions were exacerbating the global slowdown.
Asian stock markets also tumbled on 26 August, with the Hong Kong's Hang Seng index sliding 3.2% and the Shanghai Composite falling 1.3%, according to BBC News. Japan's benchmark Nikkei 225 index dropped 2.3% and the Chinese yuan weakened to a fresh 11-year low against the US dollar at 7.15 per dollar.
China and the USA have been locked in a trade battle for the past year which has seen the two countries imposing billions of dollars worth of tariffs on each other’s goods.
Trump has long accused China of unfair trading practices and intellectual property theft, according to BBC News. In China, there was a perception that the USA was trying to curb its rise.
The US soyabean industry has been particularly hit by the trade war, with the American Soybean Association (ASA) warning in May that US farmers could not withstand another year in which their most important foreign market continued to slip away and soyabean prices were 20-25% below pre-tariff levels.
