The United States has escalated its trade war with China. The higher tariffs will be applied to relevant US-bound goods exported from China. Tariffs on targeted exports have increased from ten per cent to 25 per cent. China has pledged to take counter measures. The tariff hikes could hit growth in both economies and drag down global growth. US importers received just five days’ notice about the sudden rise in penalties. The tariff increase is seen as inflicting significant harm on US industry, farmers and consumers, decreasing the competitiveness of American companies and reducing the efficiency of their global supply chains. A 25 per cent tariff on apparel imports is expected to increase costs for a family of four by 500 dollars a year.
The US’ decision to impose new taxes on Chinese exports comes after the United States accused China of backtracking on commitments made during recent negotiations on trade. China has been accused of unfair trade practices, particularly with regards to access to its giant market, intellectual property and technology transfers.
The dispute has hurt Chinese exporters, damaged some US companies and slowed global growth since it began last July. The risk of a complete breakdown in trade talks has increased. Global stock markets have endured a week of extreme volatility.