Higher tariffs on Chinese imports threatened by US President Donald Trump in tweets last weekend have kicked in as of 12:01 Eastern time Friday. $200 billion worth Chinese imports into US will now attract tariffs of 25% from 10% earlier. Beijing has vowed to retaliate, though no specific details of such tariff hikes have been made public yet.
The hike comes in the midst of two days of talks between top U.S. and Chinese negotiators to try to make a last ditch attempt to rescue a faltering deal aimed at ending a 10-month trade war between the world’s two largest economies.
Hopes of a breakthrough arose after US President Donald Trump said he had received a “beautiful letter” from Xi and suggested there was scope for a deal. Previously he had accused the Chinese of reneging on commitments made in previous rounds of negotiation.
Since last year, the two economic powerhouses have exchanged tariffs on more than $360bn in two-way trade, gutting US agricultural exports to China and weighing on both countries’ manufacturing sectors.
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, followed by about $12 billion worth of printed circuit boards used in a vast array of U.S.-made products. Furniture, lighting products, auto parts, vacuum cleaners and building materials are also high on the list of products subject to the higher duties.
The US administration bought a little extra time for talks to work. The tariff hike will not hit goods that have already left Chinese ports before Friday’s deadline. So the tariffs will not start taking effect until those shipments complete the three- to four-week voyage across the Pacific Ocean.
“This creates an unofficial window, potentially lasting a couple of weeks, in which negotiations can continue and generates a ‘soft’ deadline to reach a deal,” according to experts.