The looming trade war between the world’s two largest economies has moved into overdrive with US President Donald Trump doubling up on tariffs for China.
Mr Trump told his top trade official US Trade Representative Robert Lighthizer to consider hiking the duties from 10 per cent to 25 per cent.
The measure, which could be implemented as early as next month, is aimed at putting pressure on Beijing to change its trade practices.
“This week, the President has directed that I consider increasing the proposed level of the additional duty from 10 per cent to 25 per cent. The 25 per cent duty would be applied to the proposed list of products previously announced on July 10,” Lighthizer said in a statement to the media. “The Trump Administration continues to urge China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear about the specific changes China should undertake. Regrettably, instead of changing its harmful behaviour, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses.”
Beijing has responded by cautioning the US against “blackmailing and pressuring”. It has vowed to strike back every time the US raises tariffs.
The International Monetary Fund has warned that escalating trade disputes is the growing downside risk that’s threatening the strongest global economic upswing in seven years.
American companies, industry and consumer groups have urged the Trump administration to avoid tariffs. They have warned it could raise their costs, eventually lead to price hikes for consumers and result in job losses.
The escalation of US-China trade tensions saw the S&P/ASX 200 index fall 34.8 points, or 0.6 per cent to 6240.9.