US-China trade war ramps up as tariffs on US$200 billion in Chinese imports take effect

The Trump administration’s tariffs on another US$200 billion in Chinese goods kicked in on Monday, ramping up a trade war between the world’s two biggest economies.

The latest round of US duties took effect just after midnight Washington time on Monday (noon in Beijing) on a list of products ranging from frozen meat to television components. China is poised to retaliate with tariffs on US$60 billion in US goods, a move that President Donald Trump has said would spur new duties on another US$267 billion in Chinese imports.

If the president follows through on the escalation threat, US tariffs would cover all goods the nation imported from China last year. The conflict risks descending into a war of attrition that economists warn could undermine the global economy and upend the supply chains of multinational companies.

On Saturday China called off planned trade talks with US officials amid the escalation. The US State Department’s sanctions against China’s defence agency and its director on Thursday had contributed to the decision, according to people familiar with the situation. There is a growing consensus in Beijing that substantive talks will only be possible after the US midterm elections in November, they said.

Even as both sides slap fresh levies on each others’ products, they have peppered statements with offers to talk.

“President Trump has an excellent relationship with President Xi and our teams have been in frequent communication since President Trump took office,” Lindsay Walters, deputy White House press secretary, said in an emailed statement. “We remain open to continuing discussions with China, but China must meaningfully engage on the unfair trading practices.”

Neither side has backed down since the tit-for-tat tariff war began in July, when the US imposed duties on US$34 billion in Chinese goods. The Trump administration imposed a further US$16 billion in August. China retaliated in kind to both moves.