New Trade Tariffs from USA imposed on China [Trade War News]
US Tariffs of 25% imposed on $234B worth of Chinese Imports
New Trade Tariffs have been imposed by the US government on imports from China.
President Donald Trump escalated the trade war with China on Friday, imposing new trade tariffs on $200 billion worth of Chinese goods, now at 25%, up from the previous 10% rate.
This set the stage for Beijing to retaliate, with their own tariffs on American imports.
The Trump administration has sought to increase pressure on Chinese officials in negotiations taking place this week. After accusing China of reneging on past trade commitments, the US imposed new trade tariffs on a huge range of Chinese imports.
About $250 billion worth of Chinese products will now face a 25% duty when imported into the USA.
Previously, the majority of those products had been subject to a 10% import tax.
That could lead to higher prices on a wide range of everyday products from electronics to clothing. While Trump claims Chinese companies will pay the price, research suggests American businesses and consumers bear the brunt of tariffs.
Chinese Response to New Trade Tariff
Officials at the Chinese Commerce Ministry — vowed on Wednesday to take “necessary countermeasures” against increased new trade tariff .
They also expressed optimism that the US could “meet China halfway,” the report said.
Those could include tariffs on American products or other trade barriers.
China has already placed retaliatory duties on $110 billion worth of imports from the US, which had caused significant trouble for the US agricultural sector.
The Chinese delegation said in a statement on Friday that it “deeply regrets” the US decision.
Are the New Tariffs Here to Stay?
The escalation comes just as officials were thought to be nearing a deal.
As recently as last week, there were high hopes for the two days of trade negotiations in Washington
While both countries have indicated a trade deal is still possible, questions have been raised about the timeline.
While China might be forced to fold, experts agree that it would take more action from the US than already taken. Most likely, China will not change its approach and the US action is likely to stay permanent.
Future New Tariffs
Trump on Monday also threatened to slap steep tariffs on all remaining Chinese imports, roughly $325 billion, a move that economists warn would have widespread effects on businesses and consumers.
“New tariffs on those goods that president has so far left untaxed will fall on American families, as these mostly hit textiles, apparel, shoes, home goods, etc.,” said Mary Lovely, a trade scholar at the Peterson Institute for International Economics.
“Higher taxes on these goods are likely to be highly regressive, in that lower and middle class Americans spend a higher portion of their income on these Chinese imports than do higher income Americans,” she continued.
What goods do the new trade tariffs cover?
The tariffs cover a wide array of goods, from minerals used in manufacturing, to vegetable juices, to leather handbags.
We have a downloadable list of the goods currently affected below.
The new trade tariffs come as the US and China continue with their trade talks. Chinese Vice Premier — China’s top economic official — is in Washington to continue negotiations despite the new trade tariffs.
The list of goods that will be subject to the increased tariffs was released by the US Trade Representative Robert Lighthizer’s office in September, when the 10% rate went into effect.
The final list is notably different from the first round of tariffs on $50 billion worth of Chinese goods, because there are consumer products on the list.
The previous round focused almost exclusively on industrial equipment and machinery, while the new round includes items like hats, TVs, and food.
Consumer Goods Removed from the New Tariffs
There were 297 items removed from the USTR (United States Trade Representative) initial list, released in July, after the public comment period
- Certain consumer electronics including smartwatches
- Some industrial chemicals used for manufacturing textiles
- A few health and safety products including bicycle helmets
- Specific kinds of child safety furniture like high chairs and car seats
The USTR did not specify how it determined which products to remove beyond assertions that the official followed an inter-agency procedure and listened to feedback from businesses.
The smartwatch removal drew interest after it was revealed that Apple, makers of the Apple Watch, directly lobbied the White House.
Even with the removals, 5,745 full or partial tariff lines are included on the final list of the new trade tariffs that represent roughly $200 billion worth of Chinese imports.
Major categories of e-commerce goods included in the new trade tariffs:
Here’s a breakdown of the major categories included in the list relevant to most e-commerce sellers:
- Essential oils, perfumes:perfume; lip or eye make up preparations; manicure or pedicure products; shampoo; hairspray; bath salts.
- Soaps and cleaning products: various types of soap; leather and textile treatments; polishes for shoes and furniture.
- Glues, adhesives, and enzymes
- Cigarette lighter fluid
- Photographic goods: various types of photo plates; instant film; various types of film in rolls; various types of motion picture film.
- Various chemical products: pesticides; herbicides; fungicides
- Plastics: vinyl flooring and other plastic floor and wall coverings; sausage casings; bags; gloves including baseball gloves; rain jackets; machinery belts.
- Rubber: latex; rods, tubes, and other products; conveyor belts; various types of transmission belts; various types of pneumatic tires; gloves; gaskets; dock fenders.
- Raw hides and leather: animal skins including cow, buffalo, sheep, goats, reptile; various types of leather made from cow, buffalo, sheep, goats, reptile; leather trunks and suitcases; leather handbags; CD cases; gloves including ski, ice hockey, and typical use; belts; fur clothing, incluidng artificial fur.
- Wood: fuel wood; charcoal; various types of wood including oak, beech, maple, ash and cherry; moldings; rods; particleboard; various types of plywood; doors; corks and stoppers; wicker and bamboo baskets.
- Wood pulp products
- Paper: Newsprint; writing paper; vegetable parchment; carbon paper; self-adhesive paper; cigarette paper; envelopes; tablecloths; handkerchiefs; folders.
- Wool or animal hair products: cashmere; yarns; tapestries and upholstery.
- Cotton: fibers; thread; yarn; denim; satin.
- Flax: yarn; fabrics
- Man-made textiles: polypropylene; rayon; nylon; polyester
- Other textile products, rope, twine: hammocks; fish nets; carpets;
- Fabrics: corduroy; gauze; terry towel; lace; badges; embroidery
- Headgear: caps; hairnets; wool hats; head bands.
- Stone, plaster, cement, asbestos: stone for art; marble slabs; roofing slate; millstones; sandpaper; floor or wall tiles; cement bricks.
- Ceramics:fire bricks; pipes; tiles; porcelain and china.
- Glass and glassware: balls; rods; drawn or blown glass; float glass; tempered safety glass; mirrors; carboys, bottles, jars, pots, flasks, and other containers; microscope slides; woven fiberglass
- Precious stones and pearls: industrial diamonds; silver and products made of silver; gold and products made of gold; platinum; palladium.
- Iron and steel and products derived from the metals:drums; tubes; pipes; doors; windows; screws; horseshoes;
- Copper: plates; cables; tubes; pipes; springs
- Nickel: bars; rods; wires
- Aluminum: powder; cable; wire; screws.
- Various metal products, tools, cutlery: industrial items made from lead, zinc, tin, and more; saw blades; bolt cutters; hammers; wrenches; crow bars.
- Machinery, both industrial and retail: steam turbines; engines; fuel-injection pumps; air compressors; air conditioning machines; refrigerators; cream separators; hydraulic jacks; escalators; manure spreaders; copiers; automatic beverage-vending machines
- Electronics: vacuum cleaners; hair clippers; spark plugs; generators; bicycle lights; electric amps; television cameras; various types of TVs; video projectors.
- Vehicles and parts: axles; driving shafts; gear boxes; radiators.
- Instruments for scientific or medical purposes:microscopes; cameras for non-art purposes; gauges for pressure, electrical currents, and more.
- Clocks and watches
- Furniture, bedding, mattresses: car seats; wood chairs; furniture designed for offices, kitchens, and more; mattresses; chandeliers; lamps.
- Assorted items: buttons; stamps; paintings; collections of zoological, botanical, mineralogical, anatomical, historical, archaeological interest
Here is the full list, via the USTR:
China retaliates to the New Trade Tariffs on Chinese Imports By raising Tariffs on US Imports into China
- China has escalated the trade war with America, by announcing plans to hike the tariffs on up to $60bn of US goods, sending stocks to their lowest level in two months.
- From June 1, Beijing will charge a new trade tariff of 25% on almost 2,500 items, from food and consumer goods to chemicals and machinery.
- Other products will soon have an additional 20% or 10% new trade tariff.
- This is China’s official retaliation to America’s new trade tariffs on $200bn of Chinese-made products to 25% last Friday.
China on Monday said it would retaliate against the USA’s new trade tariffs on Chinese imports by raising the tariff rates on thousands of American products being imported into China.
Beijing plans to increase tariffs on $60 billion worth of American imports starting June 1, China’s Ministry of Finance said in a statement. The more than 5,000 items will face duties of 5% to 25%.
The Trump administration has also started to prepare new duties on about $325 billion worth of goods, which would see tariffs applied to nearly all shipments from China.
Progress toward defusing those escalations remained elusive last week even after Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer met with Vice Premier Liu He in Washington for two days of negotiations.
Just hours before Beijing’s announcement, President Donald Trump wrote a series of early-morning tweets urging China’s leadership to refrain from moving forward with plans to retaliate with their own new trade tariffs.
“China should not retaliate-will only get worse!” Trump wrote on Twitter.
“I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China,”he continued. “You had a great deal, almost completed, & you backed out!”
China’s foreign ministry pushed back against those comments, saying the country “will never surrender to external pressure.”
Financial markets fell sharply Monday as trade tensions between the largest economies escalated. In the US, the three major stock indexes each shed 1% to 2% within the first hour of trading.
A Brief History of the US-China trade war:
The war of threats of new trade tariffs…
- March 1, 2018: Donald Trump announces tariffs on all imports of steel and aluminum, including metals from China.
- March 22, 2018: Trump 25% tariff plan on $50 billion worth of Chinese goods. China announces tariffs in retaliation to the steel and aluminium duties.
- April 3, 2018: The US trade representative announces a list of Chinese goods subject to the tariffs. April 4, 2018: China creates a list of $50 billion US goods subject to retaliatory tariffs.
- May 21, 2018: China and the US announce the outline of a trade deal to avoid the tariffs.
- May 29, 2018: The White House announces that the tariffs on $50 billion worth of Chinese goods will go ahead, with the final list of goods released June 15.
- June 15, 2018: Trump rolls out the final list of Chinese imports that will be taxed. Chinese imports worth $34 billion would be subject to the new 25% tariff rate as of July 6, with another $16 billion worth of imports subject to the tariff at a later date. China retaliates with similar tariffs.
- June 18, 2018: Trump threatens 10% tariffs on another $200 billion worth of Chinese goods.
Escalation to Action: tariffs imposed
- July 6, 2018: The first US tariffs on Chinese goods kick in; China responds in kind.
- July 10, 2018: The US releases a list of another $200 billion worth of Chinese goods that could be subject to 10% tariffs.
- August 1, 2018: Washington releases plans to more than double the proposed duties on $200 billion worth of Chinese goods to 25% from 10%.
- August 3, 2018: China threatens tariffs on a further $60 billion worth of US goods if the US implements this threat.
- August 7, 2018: The US announces that the second tranche of tariffs, (hitting $16 billion worth of Chinese goods) will enter into force by August 23.
- August 23, 2018: The US implements its tariffs and Beijing counters with tariffs on $16 billion worth of US goods.
New Trade Tariff Threats from Trump…
- September 7, 2018: Trump threatens that tariffs on $200 billion worth of Chinese goods are coming “soon” and threatens another $267 billion worth of Chinese imports with tariffs.
- September 17, 2018 The US imposes these tariffs, with a schedule to increase the rate from 25% from 10% on January 1.
- December 1, 2018: Trump and the Chinese President, Xi Jinping, hammer out a truce at the G20 summit pushing the the escalation of US tariffs back until 1 March.
- December 4, 2018: Trump tweets that he is still a “Tariff Man” and says a deal will get done only if it is in the USA’s best interests.
2019 Trade Tariff Events
- February 24: Trump announces that US tariffs will not increase on March 1.
- May 5: After apparent progress in talks, Trump suddenly threatens to raise tariffs to 25% within the week and threatens new tariffs on another $325 billion of Chinese goods.
Watch my full discussion of New Trade Tariffs imposed by USA on Chinese Imports
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