The Trump administration will impose 10% tariffs on approximately $200 billion of Chinese goods starting next week and more than double the tax rate starting in 2019. The world’s top two economies may fall into a protracted trade war.
Two senior U.S. officials, who spoke on condition of anonymity, told reporters on a conference call on Monday that the government’s delay in raising the tariff rate to 25% until next year is to allow U.S. companies to adjust and find alternative supply chains. Chance. Two officials said the 10% tariff rate will take effect on September 24.
“For months, we have been urging China to change its unfair practices and give American companies fair and reciprocal treatment,” U.S. President Donald Trump said in a statement late Monday. “We have been very clear about the changes we need to make, and we have given China every opportunity to treat us more fairly. But so far, China has been unwilling to change its approach.”
Smart watches and Bluetooth devices have been removed from the tariff list, as well as bicycle helmets, high chairs, child car seats, baby guardrails and certain industrial chemicals. One of the officials said the latest list deleted 300 items from the preliminary target list released in July. Officials also said that no new products were added to the list, but the value of Chinese exports involved remained unchanged at $200 billion.
“The administration appears to be responding to some industry concerns, but this still represents rapidly rising costs and higher uncertainty for many U.S. businesses and consumers,” said Rufus Yerxa, president of the U.S. Foreign Trade Council. “Businesses hate uncertainty. They would rather have imperfect trading relationships than so much chaos.”
Beijing has said it will retaliate and impose additional tariffs on $60 billion in U.S. goods including liquefied natural gas and aircraft.
This decision by the Trump administration casts doubt on efforts to pursue a diplomatic breakthrough. China will refuse new trade negotiations with the United States if Trump introduces a new round of tariffs on Chinese goods, two people familiar with the matter said on Monday.
Earlier this month, the U.S. government proposed that Treasury Secretary Steven Mnuchin take the lead in negotiations with China, and it is expected that the Chinese leader will be Vice Prime Minister Liu He. The United States remains open to negotiations but China must show it is very willing to pursue systemic economic reforms, senior administration officials said on Monday.
With the latest tariff escalation, American consumers may begin to feel price changes on everyday goods. This round of tariffs brings the total amount of Chinese goods exported to the United States subject to additional tariffs to US$250 billion, nearly half of China’s total exports to the United States last year. The Trump administration had previously imposed 25% tariffs on a total of $50 billion in Chinese goods in July and August, triggering tit-for-tat retaliation from China.
Trump said earlier this month that he was prepared to impose tariffs on another $267 billion of Chinese goods, which would bring the cumulative total to more than the entire amount of goods the United States imported from China last year. (Title: Trump increases pressure on China and announces tariff plan on US$200 billion in goods)
