Donald Trump. Picture: REUTERS
Donald Trump. Picture: REUTERS

Washington — US President Donald Trump’s tariff increase to 25% on $200bn worth of Chinese goods took effect on Friday, ratcheting up tensions between the US and China as they pursue last-ditch talks to try to salvage a trade deal. 

With no action from the Trump administration to reverse the increase, US Customs and Border Protection (CBP) imposed the new 25% duty on affected US-bound cargoes leaving China after 4.01am GMT on Friday.

Goods in the more than 5,700 affected product categories that left Chinese ports and airports before midnight will be subject to the original 10% duty rate, a CBP spokesperson said.

The grace period was not applied to three previous rounds of tariffs imposed in 2018 on Chinese goods, which had much longer notice periods of at least three weeks before the duties took effect.

Trump gave US importers less than five days notice about his decision to increase the rate on the $200bn category of goods to 25%, which now matches the rate on a prior $50bn category of Chinese machinery and technology goods.

The hike comes in the midst of two days of talks between top US and Chinese negotiators to try rescue a faltering deal aimed at ending a 10-month trade war between the world’s two largest economies.

The biggest Chinese import sector affected by the rate hike is a $20bn-plus category of internet modems, routers and other data transmission devices, followed by about $12bn worth of printed circuit boards used in a vast array of US-made products.

Furniture, lighting products, automotive parts, vacuum cleaners and building materials are also high on the list of products subject to the higher duties.

Gary Shapiro, CEO of the Consumer Technology Association said the tariffs would be paid by US consumers and businesses, not China, as Trump has claimed.

“Our industry supports more than 18-million US jobs, but raising tariffs will be disastrous,” Shapiro said in a statement. “The tariffs already in place have cost the American technology sector about $1bn more a month since October. That can be life or death for small businesses and start-ups that can’t absorb the added costs.”

Economists and industry consultants have said it may take three or four months for US shoppers to feel the pinch from the tariff hike but retailers will have little choice but to raise prices on a wide range of goods to cover the rising cost of imports before too long, according to economists and industry consultants.