US-China trade war escalates as new round of tariffs take effect

23 August 2018 06:55 Source:ICIS News

SINGAPORE (ICIS)--The US-China trade war escalated as a new round of tariffs affecting $16bn worth of imports, including petrochemicals, took effect at midday in Asia on Thursday, raising the total value of affected goods to $50bn on each side.

The second wave of US tariffs on Chinese imports is being implemented less than two months since the first salvo on 6 July, and just as trade negotiations between the two countries were revived in Washington.

In a statement issued on Thursday noon, China’s Ministry of Commerce said that the US move is a violation of World Trade Organisation (WTO) rules.

“China firmly opposes this and has to continue to make the necessary counterattack," it said.

China had responded in kind last month when the US' 25% tariffs on $34bn of Chinese goods was implemented.

"At the same time, in order to safeguard free trade and multilateral system, and safeguard its legitimate rights and interests, China will seek WTO dispute settlement mechanism for the tariffs,” the ministry said.

The scheduled 22-23 August meeting between US treasury undersecretary for international affairs David Malpass and Chinese vice commerce minister Wang Shouwen initially raised hopes of a resolution to the ongoing trade spat between the world’s two biggest economies.

But US President Donald Trump had undermined any possible progress from the mid-level meeting before it began, saying he did not “anticipate much” from the discussions, as quoted by newswire agency Reuters.

In June, US commerce secretary Wilbur Ross had a meeting with Chinese economic adviser Liu He but no agreements were forged.

Additional reporting by Fanny Zhang

By Pearl Bantillo