US-China trade: US to impose largest tariff cycle so far

A new series of US tariffs on Chinese products is expected to come into force, the most important of the trade war.

The United States is expected to start imposing tariffs of $ 200 billion (152 billion pounds sterling) on ​​Chinese products at 12:01 pm Beijing time (04:01 GMT), in response to China's unfair trade practices.

China has announced that it will target $ 60 billion worth of US products in return for additional duties.

This is a major escalation in the trade war between the two largest economies in the world.

The latest move brings to $ 250 billion the total amount of Chinese imports hit by US tariffs since July.

This means that about half of China's imports to the United States are now subject to these new duties.

China has accused the United States of launching the "biggest trade war of economic history".

What's going on Monday?

As of the cut-off date, US companies importing the Chinese products in question will have to pay an additional 10% levy.

US tariffs will apply to nearly 6,000 items, making it the largest business rate cycle in Washington.

They will affect handbags, rice and textiles, although some items such as smart watches and high chairs have been exempted.

The tax will reach 25% from early 2019, unless the two countries agree on an agreement.

In contrast, China will impose additional duties of 5% on US goods, including small aircraft, computers and textiles, and an additional 10% on products such as chemicals, meat, wheat and wine. .

Rates to date

In total, the United States imposed three sets of tariffs on Chinese products this year, for a total of $ 250 billion.

It imposed tariffs of 25% on $ 50 billion of imports from China in two separate rounds.

In July, the White House increased the cost of $ 34 billion worth of Chinese products.

Last month, the rising trade war gained momentum when the United States introduced a 25% tax on a second wave of goods worth $ 16 billion.

Beijing fought back in kind.

China has imposed rights on $ 50 billion of US products in retaliation, targeting key parts of the president's political base, such as farmers.

Why is the United States doing this?

President Donald Trump says he wants to stop "unjust transfers of US technology and intellectual property to China" and protect jobs.

Rates, in theory, will make US-made products cheaper than imported ones, so encourage consumers to buy US products. The idea is that they would stimulate local businesses and support the national economy.

But many US companies and industry groups have testified in front of the US Trade Representative's office that their activities are being affected.

There are signs that businesses and economies are already affected and the IMF warned that major escalations would affect global growth.

Mr. Trump's pricing policies have been part of his protectionist trade agenda since taking office, challenging decades of the global free trade system.

What happens next?

Trump recently said that taxes on $ 267 billion worth of additional goods were "ready for short-term shipment," which would mean that virtually all Chinese exports to the United States would be subject to new duties. .

It is unclear how China can match the magnitude of US long-term tariffs.

The United States buys much more from China than it sells, so China has only limited room for maneuver through trade.

Analysts said China could be creative in the response.

This could make life more difficult for US companies in China or force their currency to fall to boost exports.

Mr. Trump recently accused China of doing just that. But China has responded to these accusations.

China "will never follow the path of stimulating exports by devaluing its currency," Prime Minister Li Keqiang said last week.