China on Wednesday said it would impose retaliatory 25 percent tariffs on $16 billion worth of U.S. imports, after the Trump administration issued similar tariffs against China on Tuesday.
China’s new punitive tariffs will hit U.S. goods including crude oil and automobiles, according to CNBC.
The new U.S. tariffs on $16 billion worth of Chinese goods are set to take effect on Aug. 23, and are meant to punish China for what the Trump administration says is unfair trade practices, including China’s failure to respect U.S. intellectual property rights and its policy of forced technology transfer. Last month, the administration hit China with tariffs on $34 billion worth of imports for that reason.
The White House is also weighing tariffs on another $200 billion worth of Chinese goods, and has said those could be 25 percent tariffs instead of the 10 percent tariff initially under consideration. The Trump administration said the increased tariffs are intended to force Beijing to negotiate a new bilateral trade deal.
China, in response, said it would retaliate with 5 percent to 25 percent tariffs on $60 billion worth of U.S. products.
Investors do not expect the tit-for-tat trade war with China to end anytime soon. Despite warnings that the administration’s trade agenda will weigh on profits in 2018, economists say business leaders are willing to give the Trump administration room to negotiate a deal that would level trade imbalances with the communist nation.
A slew of smaller manufacturers, who are unable to mitigate the impact of the tariffs by raising costs on customers, have announced layoffs and production cuts due to the new levies on China and trading allies like the European Union, Mexico and Canada.
[Related: ‘Point of no return’ draws closer in U.S.-China trade standoff]
