Beijing, China : China announced on Tuesday that it will impose additional tariffs on U.S. products worth 60 billion U.S. dollars starting from Sept. 24, in response to the newly announced U.S. tariffs on Chinese goods, according to the Customs Tariff Commission of the State Council.
The United States made an announcement to impose 10-percent additional tariffs on 200 billion U.S. dollars worth of Chinese products from Sept. 24, and take other escalating tariff measures.
China will have to take countermeasures to respond to the U.S.’ fresh tariff decision, in a move to safeguard the country’s legitimate interests and the global free trade order, the Ministry of Commerce said on Tuesday.
The ministry said it “deeply regrets” that in spite of the overwhelming international and domestic oppositions, the U.S. announced a 10 percent tariff on $200 billion worth Chinese goods starting from Sept 24 and will also adopt other tariff measures.
The U.S. insists on leveraging tariff hikes, which brings new uncertainty to the negotiations between the two sides, the ministry said.
The ministry added it hoped that the U.S. will recognize the potential negative consequences of its tariff actions and correct them in a timely manner.
“We feel deeply regretful over the decision. China will be forced to take synchronous countermeasures to safeguard our legitimate rights and interests as well as the global free trade order,” an MOC spokesperson said.
The U.S. additional tariffs have brought new uncertainties for bilateral consultations, the spokesperson said.
“[We] hope that the U.S. side recognizes the potentially harmful consequences of such an action and timely rectify the situation with convincing means,” the spokesperson said.
The U.S. imposition of additional tariffs on 200 billion U.S. dollars’ worth of Chinese goods came under intense fire Monday, as business leaders and trade experts opposed the escalatory move.
U.S. Chamber of Commerce President and CEO Thomas Donohue in a statement on Monday slammed the tariffs as anti-growth.
“The U.S. economy runs on pro-growth policies, but that’s not what tariffs on 200 billion dollars worth of Chinese goods deliver,” he said.
Donohue called back to a six-day hearing in August where more than 300 U.S. businesses and trade organizations pleaded that U.S. trade officials should rescind additional tariffs on Chinese goods, using statistics and props to show the reasoning behind such measures were ill-founded.
“Today’s decision makes clear that the administration did not heed the numerous warnings from American consumers and businesses about rising costs and lost jobs on Main Street, in factories, and on farms and ranches across the country,” Donohue said, lamenting that the U.S. government had turned a blind eye to the overwhelming opposition by businesses.
Hun Quach, vice president of the trade group Retail Industry Leaders Association, who has appeared repeatedly before trade officials to argue against tariffs, said in a statement that her organization was “extremely discouraged by the administration’s announcement to levy tariffs on millions of products American consumers buy every day.”
“Tariffs are a tax on American families,” Quach said. “Consumers — not China — will bear the brunt of these tariffs and American farmers and ranchers will see the harmful effects of retaliation worsen.” Quach also expressed the concern that additional tariffs imposed before the traditional shopping season will put extra burden on consumers in the United States.
Dean Garfield, the CEO of Information Technology Industry Council, called in a statement the additional tariffs “reckless.”
“President (Donald) Trump’s decision to impose an additional $200 billion (in goods) is reckless and will create lasting harm to communities across the country,” he said. “If implemented, these tariffs will have both short- and long-term effects on the United States — from increased prices at the checkout counter to decreased leadership on the emerging technologies that will shape our future.”
Gary Shapiro, representing the Consumer Technology Association, questioned the legality of newly announced tariffs.
“Today’s retaliatory tariffs are not an effective trade policy and may violate U.S. law. Congress has not given the President or the USTR (U.S. Trade Representative) a blank check to pursue a trade war. These new retaliatory tariffs run afoul of the carefully tailored provisions of the Trade Act of 1974, which require any action to be within the scope of the Section 301 investigation,” Shapiro said in a statement.
Adam Posen, a leading trade expert and President of the Peterson Institute for International Economics, said at a forum Monday that the tariff strategy is destined to fail, as it will not resolve trade disputes but will stifle U.S. competitiveness and undermine consumption power of the U.S. working class.
Jacob Lew, a former U.S. Secretary of Treasury, told the same forum that the path Washington should pursue is constructive engagement with Beijing to seek consensus and mitigate differences. Slapping tariffs against China will only make things worse, he said.
Global equity markets rallied on Tuesday as the latest tit-for-tat U.S.-Chinese trade dispute was seen as barely denting world growth, while U.S. Treasury yields rose in anticipation the Federal Reserve will hike interest rates this year and next.
MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.48 percent. Chinese shares initially slid as investors in Asia digested the details of China’s response but then rallied to push the blue-chip CSI index .CSI300 up 2 percent.
In Europe, the pan-regional FTSEurofirst 300 index .FTEU3 of leading shares closed up 0.15 percent. Wall Street rallied.
The Dow Jones Industrial Average .DJI rose 184.84 points, or 0.71 percent, to 26,246.96. The S&P 500 .SPX gained 15.51 points, or 0.54 percent, to 2,904.31 and the Nasdaq Composite .IXIC added 60.32 points, or 0.76 percent, to 7,956.11.
MSCI’s 24-country emerging market index .MSCIEF was up for the fourth day in the last five.
Despite all the noise, the widely tracked dollar currency index .DXY rose 0.14 percent, with the euro EUR= slid 0.16 percent to $1.1664.
The Japanese yen JPY= weakened 0.43 percent versus the greenback at 112.31 per dollar.
U.S. benchmark 10-year and 30-year yields both climbed to fresh four-month peaks as investors continued to price in more interest rate increases by the Fed this year and next.
Benchmark 10-year notes US10YT=RR fell 13/32 in price to lift its yield to 3.0514 percent.