President Trump Imposes New Tariffs
The threat of $200 billion in tariffs on Chinese goods became real September 17 when President Trump ordered the latest levies to go into effect on September 24. The duties are to begin at 10 percent and then jump to 25 percent should the Chinese not make any concessions by January 1.
This latest list contains 5,745 product lines, slightly less than the original 6,031 lines that were listed when the President first proposed additional tariffs. The new tariffs will apply to a wide range of items, ranging from seafood to handbags to toilet paper. Officials said, however, they will exclude some consumer electronics such as smartwatches and Bluetooth devices as well as health and safety products such as high chairs, bicycle helmets, child car seats and playpens.
There has been no announcement yet from USTR pertaining to the exclusion process or relevant deadlines.
Less than 24 hours after the President announced the additional tariffs, China hit the U.S. with $60 billion in retaliatory tariffs. According to China’s Ministry of Commerce, it had “no choice” but to retaliate.
The tariffs announced by China will impact 5,207 U.S. products and account for almost 95% of all U.S. exports to China.
China’s Ministry of Commerce noted that the tariffs would be levied at a rate between 5 and 10 percent. The tariffs go into effect September 24 at 12:01 pm.
An Ever Escalating Trade War
These actions are only increasing fears of a trade war that simply won’t end. Already, China is considering sending Vice Minister of Commerce Wang Shouwen to the U.S. for trade talks this month, instead of Vice Premier Liu He. The lower-level negotiator is a clear snub by the Chinese and a sign of just how little confidence the world’s second largest economy has in the upcoming trade negotiations.
In addition, the President already has a backup plan should these latest tariffs fail to force China to make concessions. Aside from the rate hike from 10 percent to 25 percent on January 1, 2019, Trump, in a written statement, noted that “if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”
You can read the President’s statement from the White House here.
The White House has already levied tariffs on $50 billion worth of Chinese products. Beijing responded with measures targeting $50 billion on American goods, raising fears about damage to the American farm industry.