A fresh wave of tariffs has been imposed on a portion of US$300 billion worth of Chinese goods to the U.S. at noon on Sunday.
Meanwhile, China’s first batch of retaliatory tariffs of either five or 10 percent on $75 billion of U.S. goods also went into effect.
Higher Chinese duties that took effect include an extra 10 percent on various U.S. agricultural goods, among which, soybeans were hit with an extra five percent tariff on top of the existing 25 percent.
China has also levied a new five percent tariff on U.S. crude oil.
A separate batch of Chinese goods is set to be hit with 15 percent duties on December 15. The 15 percent tariffs, which is in addition to the 25 percent tariffs already in effect, essentially covers all of China’s exports to the United States.
Negotiators from both countries have planned to meet again early this month in the U.S.
China’s Ministry of Commerce said that the new round of U.S. tariffs will not be conducive to beneficial trade talks. It expressed hopes the U.S. can return to normal bilateral trade, based on “fairness” and “mutual respect,” rather than “continuing conflict.”
Trump’s tariff strategies have hurt the confidence of U.S. consumers. A recent survey conducted by the University of Michigan shows the U.S. consumer confidence index had its biggest monthly decline since December 2012.
The index fell 8.6 to 89.8. Analysts say tariffs are the main reason as they have led to rising uncertainties and reduced expenditures.
Personal consumption expenditure accounts for about 70 percent of the U.S. economy. It is the main engine of U.S. economic growth and a key pillar of U.S. market confidence.
In addition to tariffs, personal income growth in U.S. is also showing signs of slowing. Data from the U.S. Department of Commerce shows that personal income rose by 0.1 percent annually in July, which is the smallest increase since September last year and a significant drop compared to 0.5 percent in June.
Personal savings fell from $1.32 trillion in June to $1.27 trillion, hitting the lowest level since November 2018.