Trump Sets Tariffs On $200 Billion In Imports From China

Muriel Colon
September 18, 2018

"Today, following seven weeks of public notice, hearings, and extensive opportunities for comment, I directed the United States Trade Representative (USTR) to proceed with placing additional tariffs on roughly $200 billion of imports from China", Trump said in a statement released late Monday.

Alleging that China has been unwilling to change its unfair trade practices, Trump said the new additional tariff structure would be effective September 24 from when it would be at 10 percent until the year end, but would increase to 25 per cent level from January 1.

Trump also warned that if China takes retaliatory action against US farmers and industries, the administration will pursue tariffs on about $267 billion of additional imports.

The White House has sought to pressure Beijing to reduce its trade surplus with the U.S. and protect intellectual property rights of American companies, which it says are abused in China.

Trump's decision is a significant escalation of an already serious trade dispute between the world's two largest economies - one with seemingly no end in sight.

The administration's proposal for the tariffs on $200 billion of products drew protest from technology companies earlier this year, but the final list of taxed devices described by the official avoids many big consumer brand names and products.

With the new tariffs, about half of China's imports to the United States are covered by punitive trade measures.

The action would bring the total amount of Chinese products subject to duties to $250 billion, roughly half of the amount the U.S. imported from that country in 2017.

Writing in the 1930s, Leon Trotsky explained that the interdependence of every country in the global economy meant that the program of economic nationalism, of the kind now being practised by the Trump administration, was a reactionary "utopia" insofar as it set itself the task of harmonious national economic development on the basis of private property.

A second administration official told CNBC that the cost of these tariffs would amount to 10 percent of all imports targeted, down from earlier estimates of 25 percent.

As was reported earlier in the day, some consumer electronics were spared in the official list. "Consumers - not China - will bear the brunt of these tariffs and American farmers and ranchers will see the harmful effects of retaliation worsen".

A Treasury spokesman did not immediately respond to a query on the status of the China talks invitation.

Chinese authorities have yet to confirm what steps aside from retaliatory tariffs they might take.

"Frankly, it's going to make us a much stronger, much richer nation". At the same time, China introduced its own tariffs to the same value.

The tariff duel is causing companies that rely on Chinese factories to rethink their business relationships, said Craig Allen, president of the US-China Business Council.

Beijing has since accused the United States of starting the "largest trade war in economic history". The U.S. put out about 40 per cent of the world's steel after World War II, but the figures have steadily dropped in the years since. The Apple products on the list reportedly included the Apple Watch, Apple Pencil, the HomePod smart speaker, AirPods and various chargers, cables and adapters. Japan has informed the WTO that it plans to impose retaliatory measures on United States goods to the tune of 50 billion yen (US$455 million).

"Attempts to help those hurt by globalisation via higher tariffs or other forms of protectionism, even if well-meaning, will raise prices and hurt all consumers, especially poor and middle-class families", said economist Satyam Panday of S&P Global Ratings.

Washington, Europe and other trading partners say those plans violate China's market-opening commitments.

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