Trump imposes fresh batch of tariffs on $200bn Chinese imports

US President Donald Trump has confirmed he will impose new 10% tariffs on Chinese imports worth $200bn from next Monday, 24 September.

President Trump also warned China against tit-for-tat measures, saying: “If China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267bn of additional imports.”

The US administration blames “unfair policies and practices” for the escalation of the trade war and claims China should be the one to give in to demands and give fair treatment to American companies.

Already during the summer, the US imposed tariffs on Chinese imports worth $50bn, to which China responded with their own tariffs on $50bn of US products. This new batch will come on top of these.

The new tariffs will directly hit around 6,000 consumer goods including luggage, electronics, housewares and foods. These tariffs that directly affect consumers could slow spending on large investments and purchases, potentially harming the broader economy.

The tariffs are currently 10% until the end of the year but if China does not comply with US demands they would rise to 25% by the start of 2019.

The Chinese commerce ministry has already announced it has been left with no choice but to retaliate, with officials in Beijing mulling potential "export restraints" on US supply chains, which could hit tech companies.

This could see China restrict export of goods, raw materials and components core to US manufacturing supply chains, former finance minister Lou Jiwei said, according to a Reuters report. China was, according to a weekend report in the state-run Global Times, "looking forward to a more beautiful counter-attack and will keep increasing the pain felt by the US".

Talks between both countries have been unproductive so far since both sides refuse to cave in to the other’s demands.

Analyst Naeem Aslam at Think Markets was sceptical about how China could respond in kind, since its imports to the US reach $506bn whereas US imports to China only amount to $130bn.

“There is no way that China can win this war by playing the dollar for dollar tariffs game alone, it would have to use other weapons at its disposal such as putting tariffs on US services or making the trading environment difficult for US companies to operate in China.”

Although Asian shares were down this morning and markets were affected by the announcemennt they have not react as severely as feared.

Neil Wilson, analyst at Markets.com said the market is still taking these trade wars "largely in their stride", though the Dow Jones fell 0.4% and S&P 500 dropped 0.6% overnight, with the Nasdaq registered its worst daily decline since the end of July as big tech stocks were all lower.