WASHINGTON • The US began collecting 25 per cent tariffs on many Chinese goods arriving at US seaports yesterday morning, drawing retaliation from Beijing in an intensification of the trade war between the world's two largest economies.
China, too, began collecting higher retaliatory tariffs on many items on a US$60 billion (S$82 billion) target list of US goods yesterday. The tariffs, announced on May 13 and taking effect as of midnight in Beijing, apply additional 20 per cent or 25 per cent tariffs on more than half of the 5,140 US products targeted.
Beijing had previously imposed additional rates of 5 per cent or 10 per cent on the targeted goods.
US President Donald Trump imposed the tariff increase on a US$200 billion list of Chinese goods on May 10, but had allowed a grace period for sea-borne cargoes that departed China before that date, keeping them at the prior 10 per cent duty rate.
The US Trade Representative's office set a June 1 deadline for those goods to arrive in the US, after which US Customs would begin collecting the 25 per cent duty rate at the country's ports. The deadline expired at 12.01am yesterday.
The tariff increase affects a broad range of consumer goods and intermediate components from China, including Internet modems and routers, printed circuit boards, furniture, vacuum cleaners and lighting products.
No further trade talks between Chinese and US negotiators have been scheduled since the last round ended in a stalemate on May 10, the same day that Mr Trump announced higher tariffs on US$200 billion worth of Chinese goods and then took steps to levy duties on all remaining Chinese imports.
China ordered the latest tariff increases in response to Mr Trump's move. Beijing has grown more strident in recent weeks, accusing Washington of lacking sincerity, and vowing not to cave in to the Trump administration's demands.
China yesterday said it will lay out its position on trade talks with the US in a White Paper and hold a rare press conference on the issue today. The document will be released at 10am today, and Vice-Commerce Minister Wang Shouwen will then take questions from the press, said the State Council of Information Office.
Investors are now looking to a possible meeting between Mr Trump and Chinese President Xi Jinping at the end of the month at the Group of 20 summit in Osaka for a possible rapprochement and easing of trade tensions.
Markets have been roiled by the threats and rhetoric on trade, with the S&P 500 having its worst month of May in seven years.