The United States government decided to impose the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement. The Trump administration raised the stakes in its trade war with China on Tuesday, saying it would slap 10% tariffs on an extra $200 billion worth of Chinese imports.
U.S. officials released a list of thousands of Chinese imports the administration wants to hit with the new tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum. It also includes consumer goods ranging from car tires, furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.
Last week, Washington imposed 25% tariffs on $34 billion of Chinese imports, drawing immediate retaliatory duties from Beijing on US imports in the first shots of a heated trade war. US President Donald Trump had warned then that his country may ultimately impose tariffs on more than $500 billion worth of Chinese imports.
The news sent stocks tumbling, and prompted a senior Chinese commerce ministry official to warn that the United States was harming the global trade order.
Shares of technology and property developers paced the declines on the mainland and in Hong Kong. Beijing Certificate Authority fell by the 10% daily limit to 27.57 yuan in Shenzhen and Tianze Information Industry slumped by 8.9% to 13.48 yuan.
Shares of Tesla's Chinese suppliers defied the downward trend in the broader market, after the US manufacturer of electrical vehicles said it will set up a Gigafactory in Shanghai with an annual output of 500,000 units. Shenzhen Kedali Industry surged by the 10% daily cap to 29.57 yuan and VT Industrial Technology jumped by 10% to 33.77 yuan. Shanghai Baolong Automotive added 7.4% to 29.46 yuan.
ECONOMIC NEWS:- China's producer inflation accelerated to a six-month high in June, lifted by strong commodity prices and threatening to put more pressure on the country's exporters amid Sino-U.S. trade tensions. Annual consumer inflation also edged up as food prices rose at a faster pace, official data showed. The producer price index (PPI) a gauge of industrial profitability rose 4.7% in June from a year earlier, compared with a 4.1-percent increase in May, according to the National Bureau of Statistics. On a month-on-month basis, the PPI rose 0.3% in June, compared with 0.4-percent growth in May. The consumer price index (CPI) rose 1.9% in June from a year earlier. On a month-on-month basis, the CPI fell 0.1%. The core consumer price index, which strips out volatile food and energy prices, was unchanged at 1.9% in June.
CURRENCY NEWS: The Chinese yuan was down against the dollar on Wednesday, despite the People's Bank of China fixed stronger mid-point rate amid escalation of the trade conflict. Washington's latest move, which comes just days after both countries imposed tit-for-tat tariffs on $34 billion of each other's goods, ups the ante in a heated trade dispute that has rattled global financial markets. The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 25 basis points to 6.6234 against the U.S. dollar Wednesday, according to the China Foreign Exchange Trade System. The onshore yuan opened at 6.6694 per dollar and was changing hands at 6.6660. The offshore yuan was at 6.6726 per dollar after hitting a low of 6.6918, down nearly 0.5% on day at one point in Asian trade.
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