China and the United States escalated their trade war yesterday, with both sides implementing punitive 25 per cent tariffs on US$16 billion (S$21.9 billion) worth of the other's goods. If the White House continues to raise trade barriers, the purchasing power of US households will be reduced, the officials said, according to a report from Agence France-Presse.
The tariffs are aimed at Chinese goods - such as aircraft parts and computer hard drives - that Washington says have benefited from unfair trade practices.
U.S. Treasury's David Malpass, undersecretary for worldwide affairs, is leading two days of talks, which began Wednesday, with China's Vice Commerce Minister Wang Shouwen and Chinese Vice Finance Minister Liao Min.
U.S. Treasury officials have been working on a revised list of American demands in the lead-up to this week's meetings, according to people familiar with the U.S. preparations.
There is concern that if the tariff exchange continues, China will sooner or later include US crude oil imports in the list of products to be sold more expensively in the world's second-largest economy.
"China firmly opposes it and has to once again take necessary counter-measures", it said. United States officials worry they might erode the US' industrial leadership.
In a brief statement on Friday, the Chinese commerce ministry said both sides had a "constructive" and "candid" exchange over trade issues, and will stay in touch on the next steps. -China relations at the Center for Strategic and International Studies in Washington.
Beijing has denied USA allegations that it systematically forces the unfair transfer of United States technology and has said that it adheres to World Trade Organization rules.
The US imposed 25 per cent tariffs on another $16 billion of Chinese goods just after midnight.
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And as China has vowed to retaliate further, Trump has threatened to target all $500 billion in goods the United States imports.
More are in the pipeline, adding to risks for global economic growth.
They have assumed a direct impact on China's economic growth this year of 0.1 to 0.3 percentage point, and somewhat less for the U.S., but the impact will be bigger next year, along with collateral damage for other countries and companies tied to China's global supply chains. Previous negotiations failed to produce any lasting deals, and President Donald Trump has suggested the current talks may not be much different.
His hard line has rattled Beijing and spurred rare criticism within the highest levels of China's ruling Communist Party over its handling of the trade dispute, sources have said.
Shipping containers are seen at a port in Shanghai, China July 10, 2018.
Beijing denies Washington's allegations and insists it adheres to WTO rules.
Foreign Ministry spokesman Lu Kang would not reveal any details of the talks during a daily news briefing.
China so far has retaliated in kind, hitting American agricultural goods and autos in July, along with new taxes on more than 300 U.S. products Thursday.
The U.S. and China imposed fresh, previously announced tariffs on each otherâs goods in the middle of trade talks. The list of USA products this time includes oil products and coal for the first time, S&P Global Platts reports. US President Donald Trump is insisting that China should bring down the trade deficit by Dollars 100 billion immediately followed by USD 200 billion by improving access to more US goods ensuring intellectual property rights of the American technology.