China hits back hours after Trump doubles tariffs to 20pc

BEIJING: China has imposed tariffs as high as 15 percent on US goods and banned exports to some defence companies in retaliation for the Trump administration’s new levy, escalating a trade war between the world’s two largest economies.

Beijing said it would charge new duties on American food and agricultural products including chicken and cotton after the US doubled a tariff on all Chinese exports on Tuesday. Soybeans, beef and fruits are among products facing a 10 percent tariff, according to an announcement by the Ministry of Finance.

Financial markets largely took the moment the tariffs on China, Canada and Mexico came into effect in stride – with Chinese stocks even climbing intraday. In the run-up to the deadline, though, US equities tumbled the most this year, while Treasury note yields fell to the lowest in four months and oil dropped to a three-month low, reported Bloomberg.

The Chinese government hit back hours after Trump signed an executive order for the hike to 20 percent, saying China had done too little to stop the flow of illicit fentanyl into the US.

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“The US unilateral tariff increase damages the multilateral trading system, increases the burden on US companies and consumers, and undermines the foundation of economic and trade cooperation between China and the US,” the Ministry of Finance said.

The Chinese tariffs, effective March 10, affect some of the most important US agriculture exports to China, and come as America farmers are weeks away from planting crops for the coming season.

The Chinese Ministry of Commerce has said it would put 10 American companies on an unreliable entity list, mainly involved in defence work. It also added 15 farms including defence contractors General Dynamics Land Systems and Skydio Inc., to an export control list.

China also announced it would open a complaint against the US for its latest tariff measures under the World Trade Organisation.

Chinese policymakers are expected to boost domestic consumption to offset expected losses to its exports, which contributed nearly a third of the economy’s growth last year.