The trade war between the China and United States just got a lot bigger after both sides announced their broadest waves of tariffs yet. The latest exchange of fire means the two economic superpowers will soon have imposed tariffs on more than $360 billion of goods. And analysts say the battle is likely to get worse, even as China starts to run low on ways to retaliate.
The Chinese government said late Tuesday that it would impose tariffs on US goods worth $60 billion following the Trump administration’s announcement that it was hitting $200 billion worth of Chinese goods with new tariffs.
China’s new tariffs will be levied at rates of 5% or 10%, depending on the product, from the same date. The Customs Tariff Commission of the State Council unveiled lists of 3,571 items of U.S. products to be subject to additional tariffs of 10 percent, and lists of another 1,636 items to be subject to additional tariffs of 5 percent.
The US tariffs start at a rate of 10%, before rising to 25% at the end of the year. They come into effect on September 24, and will apply to thousands of Chinese products, ranging from food seasonings and baseball gloves to network routers and industrial machinery parts.
Chinese products on Monday’s list include raw silicon and other products used in chip making, including items such as quartz reactor tubes and holders designed for insertion into diffusion and oxidation furnaces for semiconductor wafer production. The list also includes smart cards, as well as technology products used in data centers and networking gear.
Both the Semiconductor Industry Association and SEMI — a trade group which represents semiconductor equipment vendors and others — testified during the August hearing that imposing the tariffs on semiconductor industry products would put U.S. companies at a disadvantage in relation to international competitors and threaten the market share of U.S. firms in China, as well as hurting U.S. exports and jobs while raising the cost of goods for U.S. consumers.
Chip and equipment firms and industry groups have expressed support for the administration’s aims around intellectual property protection. But both the SIA and SEMI — like nearly all U.S. trade groups, economists and analysts — oppose the tariffs, which they say will ultimately harm the global economy and penalize U.S. companies and consumers.
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