U.S. hikes tariffs on Chinese goods, China says to strike back

• U.S. President Donald Trump’s tariff increase to 25% on $200 billion worth of Chinese goods took effect on Friday, Beijing said it would strike back.
• The new 25% duty on affected U.S.-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday.
• Goods in the more than 5,700 affected product categories that left Chinese ports and airports before midnight will be subject to the original 10% duty rate.
• The biggest Chinese import sector affected by the rate hike is a $20 billion-plus category of internet modems, routers and other data transmission devices.
• U.S. stock futures fell and Asian shares pared gains after the U.S. tariff hike, with investors worried that a protracted trade war could hamper global economic growth.
• The hike comes in the midst of two days of talks between top U.S. and Chinese negotiators to try to rescue a faltering deal.

U.S. President Donald Trump’s tariff increase to 25% on $200 billion worth of Chinese goods took effect on Friday, and Beijing said it would strike back, ratcheting up tensions as the two sides pursue last-ditch talks to try salvaging a trade deal.China’s Commerce Ministry said it “deeply regrets” the U.S. decision, adding that it would take necessary countermeasures, without elaborating.The hike comes in the midst of two days of talks between top U.S. and Chinese negotiators to try to rescue a faltering deal aimed at ending a 10-month trade war between the world’s two largest economies.

Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume talks on Friday.The Commerce Ministry said that negotiations were continuing, and that it “hopes the United States can meet China halfway, make joint efforts, and resolve the issue through cooperation and consultation”.

With no action from the Trump administration to reverse the increase as negotiations moved into a second day, U.S. Customs and Border Protection imposed the new 25% duty on affected U.S.-bound cargoes leaving China after 12:01 a.m. EDT (0401 GMT) on Friday.Goods in the more than 5,700 affected product categories that left Chinese ports and airports before midnight will be subject to the original 10% duty rate, a CBP spokeswoman said.The grace period was not applied to three previous rounds of tariffs imposed last year on Chinese goods, which had much longer notice periods of at least three weeks before the duties took effect.The grace period was not applied to three previous rounds of tariffs imposed last year on Chinese goods, which had much longer notice periods of at least three weeks before the duties took effect.

Trump gave U.S. importers less than five days notice about his decision to increase the rate on the $200 billion category of goods to 25%, which now matches the rate on a prior $50 billion category of Chinese machinery and technology goods.

RETALIATE HOW?

James Green expected China to increase non-tariff barriers on U.S. companies, such as delaying regulatory approvals, as it couldn’t hit the same amount of imported U.S. goods with higher tariffs. a senior adviser at McLarty Associates who was the top USTR official at the embassy in Beijing until August.