Monday, 20 August, 2018

U.S. tariffs on China: Trump administration adds $16 billion

Cars to be exported are seen at a port in Lianyungang Jiangsu province China Cars to be exported are seen at a port in Lianyungang Jiangsu province China
Nellie Chapman | 09 August, 2018, 04:39

But there seems no solution at sight as the Trump administration prepares for tariffs of up to 25 per cent on an additional Dollars 200 billion in Chinese products.

The revised Chinese list released today added hundreds of new items to be hit with tariffs, and now covers items as diverse as coal, medical instruments, waste products, cars and buses.

The US will impose 25 percent tariffs on $16 billion (€13.7 billion) worth of Chinese imports, in addition to the tariffs already in place, the Trump administration announced on Tuesday.

According to the Chinese Ministry of Commerce, the measure will come into effect on August 23, the same day as America's latest levies.

The tariffs are aimed at industrial, rather than consumer, imports.

Trump, who has boasted that trade wars are "easy to win", has threatened to ramp up the pressure and slap tariffs on virtually all of China's exports to the United States if Beijing does not back down and take steps to reduce the $335 billion USA trade deficit with that country.

That total could soon increase. China's exports to the USA fell by 2.5 percent to $41.5 billion month-on-month, while imports of United States goods plunged 1.5 percent to $13.4 billion, according to data from General Administration of Customs on Wednesday, as quoted by the media. Those duties could be in place after a comment period ends on 6 September.

The latest $16 billion list from the United States will hit semiconductors from China, even though numerous basic chips in these products originate from the United States, Taiwan or South Korea.

Prior to the beginning of what is being dubbed as a "trade war" Chinese electric bikes were subject to no tariff and motors just 4%.

July figures showed the US' trade deficit with China decrease only slightly.

This is part of the US' response to China's "unfair trade practices" related to the forced transfer of American technology and intellectual property, the US Trade Representative (USTR) said.

Farmers for Free Trade in the US (FFF) has said American farmers are already seeing market disruption, and that the trade disputes "could cost billions of dollars to the already-stressed food and agricultural sector in the US". But it held off on a final $16 billion as a result of concerns raised by United States companies.

At the weekend, Trump said he had the upper hand in the trade war, while Beijing responded through state media by saying it was ready to endure the economic fallout.

The markets will turn weaker if the tariff damage starts to show up in US inventories numbers, but since Chinese refiners had been limited buyers since early July, it may not show up in the numbers for weeks. China has vowed to retaliate with equivalent tariffs against any USA action. But within days, Trump himself backed away from the deal, saying talks would "probably have to use a different structure".