The United States and China imposed more tariff hikes on billions of dollars of each other’s automobiles, factory machinery and other goods Thursday in an escalation of a battle over Beijing’s technology policy that companies worry will chill global economic growth.
The 25 percent increases took effect as envoys from both sides held their first high-level talks in two months in Washington. No details were released about the two-day meeting that started Wednesday.
The penalties, previously announced, apply to $16 billion of goods from both sides including automobiles and metal scrap from the United States and Chinese-made factory machinery and electronic components. They follow last month’s first round of tariff increases of the same size by both sides on $34 billion of each other’s imports.
The Chinese government criticized the U.S. increase as a violation of World Trade Organization rules and said it would file a legal challenge.
Beijing has rejected U.S. demands to scale back plans for state-led technology development that its trading partners say violate its market-opening commitments and American officials worry might erode the United States’ industrial leadership.
With no settlement in sight, economists warn the conflict could spread and knock up to 0.5 percentage points off global economic growth through 2020.