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U.S. triggers new tariffs, China vows to strike back

Credit: Reuters Studio
Published on May 10, 2019 - Duration: 01:42s

U.S. triggers new tariffs, China vows to strike back

U.S. President Donald Trump's tariff increase to 25% on $200 billion worth of Chinese goods takes effect, and Beijing says it will strike back, ratcheting up tensions as the two sides pursue last-ditch talks to try salvaging a trade deal.

Ed Giles reports.

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U.S. triggers new tariffs, China vows to strike back

Donald Trump made good on his promise to hike up tariffs on Chinese goods Friday (May 10) right in the middle of negotiations between both sides in Washington.

(SOUNDBITE) (English) U.S. PRESIDENT DONALD TRUMP RESPONDING TO QUESTION ABOUT WHETHER HE EXPECTS TO HAVE A TRADE DEAL WITH CHINA THIS WEEK, SAYING: "So, I have no idea what's going to happen.

I did get last night a very beautiful letter from President Xi.

Let's work together.

Let's see if we can get something done.

But, they renegotiated the deal." They kicked in a minute after midnight East Coast time.

Hours later China didn't have much to say, with Beijing saying it quote "deeply regrets" the decision but that it would take countermeasures.

The country's commerce ministry didn't say what those would be.

Trump announced the duty hike earlier in the week after news that China had backtracked on nearly all its promises in a draft trade agreement The news shook up the markets and gave U.S. importers of Chinese goods less than five days' notice.

But this time around the tariffs won't be applied in quite the same way as the previous three rounds from last year.

According to U.S. authorities any goods which left Chinese ports or airports before the midnight deadline will not be subject to the new increased duty.

Goldman Sachs called it a window of opportunity - a few weeks for negotiators to hammer out a deal before the tarrifs really bite.

Facing the most pain: high-tech goods from internet modems to circuit boards but also more humdrum items like vaccuum cleaners and furniture.

One industry insider called the hike quote 'disastrous' for the tech industry, and the public as well.

Trump has hinted that the tariffs are paid by China.

But economists say actually it's U.S. businesses which end up footing the bill, eventually passing the costs on to shoppers in the form of higher prices.

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