The trade war between the US and China escalated on Tuesday with US President Donald Trump’s administration saying that it will impose tariffs on Chinese imports worth $ 200 billion.
Releasing a list of Chinese products that could be hit by tariffs by September, the Trump administration said it will impose a 10 percent tariff on an additional $200 billion of Chinese imports.
The move comes just days after the two countries imposed tit-for-tat tariffs of $34 billion on each other’s goods.
The new list names more than 6,000 items including food products, minerals and consumer goods such as handbags.
Investors fear a trade war between the world’s two biggest economies could hit global growth. The Sensex opened weak on Wednesday on this overnight developmenty.
Globally, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.5 percent, while the main indexes in Hong Kong and Shanghai fell more than 2 percent.
S&P 500 and Dow futures dropped around 1 percent, pointing to a weak opening on Wall Street later on Wednesday.
“As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese import,” US Trade Representative Robert Lighthizer said in a statement said, according to news reports.
Lighthizer further said that Trump administration has urged China to stop its unfair practices and open its market.
“Unfortunately, China has not changed its behavior – behavior that puts the future of the U.S. economy at risk,” his statement read.
Last week, Washington imposed 25% tariffs on $34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of US exports to China.
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