The Tariff Policy Commission of China’s Cabinet has announced that will increase the tariff on United States (U.S.) goods worth U.S. $ 60 billion, from 10% to 25%, from June 1, 2019.
The goods have been classified under 4 categories for the purpose of imposing new tariffs.
• Category 1: Goods include cotton, machinery and grains. The tariffs on these goods went from 10% to 25%
• Category 2: Goods include aircraft parts, optical instruments and certain types of furniture. The tariff on these goods increased from 10% to 20%
• Category 3: Goods include corn flour and wine. The tariff on these increased from 5% to 10%
• Category 4: Goods include certain types of chemical, rare earths, medical equipment like ultrasound and MRI machines. This remained unchanged at 5%
For the records, the tariff hike is seen as a retaliation after the U.S. increased tariff on Chinese goods worth U.S. $ 200 billion, from 10% to 25%.
In a media statement, The Chinese Ministry of Finance said, “China hopes the United States will return to the right track of bilateral trade negotiations, work together with China and meet China halfway to reach a mutually beneficial and win-win agreement on the basis of mutual respect and equality.”
China’s announcement came after the President of U.S. – Donald Trump made a series of tweets accusing China of delaying the trade talks and asking them not to retaliate to U.S.’s move of imposing tariff on Chinese goods.
Donald Trump’s tweeted, “Their is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today. This has been proven recently when only 4 points were paid by the U.S., 21 points by China because China subsidizes product to such a large degree. Also, the Tariffs can be completely avoided if you by from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs. Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!”
He further tweeted, “There will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!”
..There will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!
— Donald J. Trump (@realDonaldTrump) May 13, 2019
Another tweet read, “I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out!”
Few days ago, a Chinese delegation led by Vice-Premier – Liu He failed to reach a deal with its U.S. in Washington with talks ending abruptly.
Post this, the stock market in U.S. tumbled with Dow Futures, S&P 500 Futures and Nasdaq Futures falling by 1.86%, 1.89% and 2.54% respectively.
