United States president Donald Trump has just escalated the trade war with China.

Following his announcement of 10 per cent tariffs on the remaining $200bn of Chinese goods imported into the US which is slated to be implemented from September 1, Trump on Friday increased tariff rates on Chinese goods as retaliation to China imposing tariffs $75 billion worth of US products. It should be mentioned that the latest Chinese tariffs were in response to US tariffs imposed earlier.

With this latest hike in the rate of tariffs, the total tariffs on Chinese goods imported into the US worth $250 billion reached 30 per cent. Trump waited till the close of the stock markets to make the announcement for the hike in tariffs. Additionally, import tariffs on another set of Chinese goods worth $300 billion was also effectively raised to 15 per cent which were set to be levied from September 1. For the rest of the Chinese imports, the hiked rate would become effective from October 1.

Announcing the hike in the import tariffs, Trump tweeted: “For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more. Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight….”

The trade war between the two largest economies of the world has been ongoing for more than a year and has gained ferocity with every new tariff imposed by either party. This trade war has not only upended the global trade system but also roiled the stock markets around the world and has threatened to significantly slow down global economic growth.

There was a drop of more than 600 points in Dow on Friday following the tweet of Trump earlier in the day.

China is also not mum on the tariffs being imposed by the Trump administration. Beijing also imposed retaliatory tariffs of its own on US goods imported into the country as retaliation to every tariff announced and imposed by Trump.

The first step was however taken by Trump in last fall when he levied a tariff of 10 per cent on $200 billion in Chinese imports and most of the goods levied then were those that were mostly business to business. That tariff rate was increased to 25 per cent this May by Trump. The tariffs announced by Trump in August on Chinese goods worth $300 billion which were primarily consumer products and analysts feel that those tariffs would directly impact the prices being paid by American for a wide range of products.

These tariffs also highlight the fact that the two parties – Washington and Beijing, are not even close to a trade agreement, negotiations for which have been going on for quite some time with intermediate halts. Both the countries are expected to restart negotiations again in September this year. No date however has been fixed for it.

(Adapted from Vox.com)

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