Trade war escalates as US and China impose new tariffs

Washington has levied fresh tariffs on $112bn (£92bn) of Chinese imported goods such as speakers, food, shoes and nappies.

The move marks the opening phase of President Donald Trump's latest pledge to place 15% duties on $300bn of Chinese imports by the end of the year.

In what the BBC describes as a “sharp escalation in the bruising trade war,” Trump's move has been met by Beijing's levy of 5% on US crude oil.

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China, which has imposed additional tariffs on some of the US goods on a $75bn target list, told Washington to stop acting like a “bully” as the two countries’ fresh tariffs came into force yesterday.

The state media Xinhua news agency said: “The United States should learn how to behave like a responsible global power and stop acting as a ‘school bully’.

“As the world's only superpower, it needs to shoulder its due responsibility, and join other countries in making this world a better and more prosperous place. Only then can America become great again.”

Retailers in the US retailers say they will be forced to pass on the cost of the fresh tariffs to consumers. The president of the American Apparel and Footwear Association, Rick Helfenbein, describes Trump’s latest tariffs as like “punishing your daughter for something your son did. It makes no sense”.

Australian market strategist, Greg McKenna, told The Guardian the tariffs come at a sensitive time for the US economy.

“All the while the tariffs are actually being imposed and the global growth, earnings, and interest rate cycles are pointing down again,” he said.

“On top of that, the inverted US yield curve suggests to many that at best the US economy is slowing materially and at worst that the recession count down has begun.”