U.S. to impose tariffs on $200 billion Chinese imports

Clay Curtis
July 13, 2018

On Tuesday, the US Trade Representative's office announced a $200bn list of Chinese goods for possible 10 percent tariffs including fish, apples and burglar alarms.

The USTR will accept public comments on the latest round of tariffs and hold hearings August 20-23 before reaching a decision after August 31, according to a senior US official who briefed reporters on condition of anonymity.

The eventual goal is to impose tariffs on 40% of Chinese imports, the same proportion of us goods hit by Beijing's retaliation, an official told reporters.

The initial USA tariff list focused on Chinese industrial products in an attempt to limit the impact on American consumers. China announced a $3 billion list of USA goods including pork, apples and steel pipe on Friday that it said may be hit with higher tariffs.

"There is still a good six or seven weeks before these (tariffs) take effect so it is not like we are going to see these tomorrow, but it is definitely the next step in a trade war", TD Securities global strategist James Rossiter said.

"Unfortunately, China has not changed its behavior - behavior that puts the future of the USA economy at risk", he continues. China immediately retaliated with tariffs on its own list of $34 billion worth of American goods. "The last thing America's manufacturing workers need is an escalating trade war", NAM CEO Jay Timmons said in a statement. "America has China's attention, so instead of more tariffs, the US and China should immediately begin working toward a fair, bilateral, enforceable, rules-based trade agreement to end China's market-distorting activities".

Automobiles and home furnishing retailers are expected to be hit particularly hard by the new United States tariffs because China supplies 65% of U.S. furniture imports, according to analysts at Goldman Sachs. "For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition". In tweets from Brussels, where he was meeting with North Atlantic Treaty Organisation allies, the president blamed other nations' policies for hurting USA agriculture, despite the fact that farm exports have grown in recent years.

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Chinese state media framed such cooperation in the context of the increasingly bitter trade dispute with Washington. China had "no choice but to take necessary countermeasures" without specifying what they might be.

He also called this latest round of proposed tariffs targeting $200 billion of Chinese goods "an appropriate response.to obtain the elimination of China's harmful industrial policies".

Republican U.S. Senate Finance Committee Chairman Orrin Hatch said the U.S. announcement "appears reckless and is not a targeted approach". "The steel tariffs alone could increase the cost of a 280-mile pipeline by as much as $76 million", Gerard, Dooley, and Hamberger said.

In fact, China is America's second-largest crude oil customer after Canada and is also one of the biggest importers of USA propane and liquefied natural gas (LNG).

"There certainly is going to be pronounced risks mainly because we have now moved on to the tit-for-tat-for-tit phase of it", said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore. Within four days, the trade war had escalated: a second round of tariffs is already on the horizon.

Trump himself is frustrated with Beijing's reluctance to offer more concessions, especially after the USA reversed a decision to slap crippling restrictions on Chinese telecom-equipment maker ZTE Corp., according to a White House official who declined to be identified.

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