The United States officially increased the tariffs on about $200 billion worth of Chinese imports in the US from 10% to 25% today. The rather sudden increase of the tariff rate was reportedly caused by China going back on some of the conditions agreed upon early in the talks between the two countries. According to President Donald Trump, putting more pressure on China’s already slowing down economy will help convince the Asian country to concede to the United States in the negotiations and sign a trade agreement quickly.
The Chinese government was not happy about Trump’s decision, with the Commerce Ministry calling it regrettable. China has already stated that they will be ready to take the necessary steps to punish the United States for the extra tariffs, though it is unclear how that could happen, since China only has about $10 billion of American imports left that they can tax. China simply exports to the United States much more than the US exports to China, which is why the American government has more goods they can place a tariff on.
This latest development has caused doubt among investors that the two largest economies in the world will be able to end their trade war peacefully and reach an agreement. Nevertheless, the Chinese negotiations team is still in the United States and the talks continue.
