USA imposes new $200bn tariffs on China

Roman Schwartz
September 18, 2018

Donald Trump has moved to slap a 10 per cent tariff on about $200bn in Chinese imports beginning next week and threatened to increase the rate to 25 per cent in 2019 if no deal is reached to ease trade tensions between the USA and China.

The new wave is scheduled to go into effect September 24, with tariffs starting at 10 percent before climbing to 25 percent by the end of the year.

"Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately United States dollars 267 billion of additional imports", Trump said in a strong warning to China.

But over the weekend the Wall Street Journal reported US President Trump planned to announce tariffs on $200 billion of Chinese goods early this week and that the move could cause Chinese officials to cancel the talks.

Yang Weimin, deputy director for economic affairs at the Communist Party's top advisory body, said at the China Development Forum in Beijing on Sunday that China would not negotiate while under pressure. "These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy".

I personally think it is likely some reduction in tariffs will eventually be found, as the Chinese economy relies so much on the US economy and building economic supply chains with other nations will take a long time and simply doesn't have the same economic value.

While economists generally estimate that the overall economic impact of the tariffs will be a fraction of a percentage point, they caution that the effects are hard to predict.

"Right after close of business, we'll be announcing something", Trump told reporters at the White House.

"We are looking forward to a more attractive counter-attack and will keep increasing the pain felt by the USA", the Chinese-language column said. "And that's not including certain items that we won't even talk about".

Sohn said he thinks that China will retaliate against every USA tariff and that the back-and-forth sparring will escalate until the United States is taxing all Chinese imports - $524 billion past year.

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China's exports hit by Trump's new $US200 billion of tariffs.

China had previously vowed to retaliate further against any new USA tariffs, with state-run media arguing for an aggressive "counterattack".

"Our concern with these tariffs is that the United States will be hardest hit, and that will result in lower USA growth and competitiveness and higher prices for U.S. consumers", Apple said in a letter commenting on the proposal.

Once the new round of tariffs takes effect on September 24, punitive duties will be in place on roughly half of the products the USA buys from China - its largest source of imported merchandise. And in a victory for Apple Inc. and its American customers, the administration removed smart watches and some other consumer electronics products from the list of goods to be targeted by the new tariffs.

Mr. Trump said China has been "unfair" for months.

"Let's face it, nobody on either side has any idea how long this tariff war will last or where it will end up", said Rufus Yerxa, president of the National Foreign Trade Council.

China's 'counterattack strategy needs to restrict exports to the United States as well as (imports of) USA goods, ' Lou was paraphrased as saying.

Through July, the U.S. ran a US$233.5b trade deficit in goods trade with China, an 8 per cent increase compared with the same period in 2017.

A decision to back away from confrontation with China could be made only by one man.

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