The source said the Trump administration was expected announce the tougher proposal as early as later yesterday. The plan to more than double the tariff rate was first reported by Bloomberg News. There was no immediate reaction from the Chinese government. In July it accused the United States of bullying and warned it would hit back. Investors fear an escalating trade war between Washington and Beijing could hit global growth, and prominent US business groups have condemned Trump’s aggressive tariffs.
Stock markets edged up globally on Tuesday on a report that the United States and China were seeking to resume talks to defuse the budding trade war. Representatives of US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have been speaking privately as they seek to restart negotiations, Bloomberg reported, citing sources. A spokeswoman for the US Trade Representative’s Office declined to comment on the proposed tariff rate increase or on whether changing them would alter the deadlines laid out for comment period before implementation. In early July, the US government imposed 25% tariffs on an initial $34bn of Chinese imports.
Beijing retaliated with matching tariffs on the same amount of US exports to China. Washington is preparing to also impose tariffs on an extra $16bn of goods in coming weeks, and Trump has warned he may ultimately put them on over half a trillion dollars of goods — roughly the total amount of US imports from China last year. The $200bn list of goods targeted for tariffs — which also include Chinese tilapia fish, printed circuit boards and lighting products — would have a bigger impact on consumers than previous rounds of tariffs. Erin Ennis, senior vice president of the US China Business Council, said a 10% tariff on these products is already problematic, but more than doubling that to 25% would be much worse.
“Given the scope of the products covered, about half of all imports from China are facing tariffs, including consumer goods,” Ennis said. “The cost increases will be passed on to customers, so it will affect most Americans pocketbooks.” Trump had said he would implement the $200bn round as punishment for China’s retaliation against the initial tariffs aimed at forcing change in China’s joint venture, technology transfer and other trade-related policies. He also has threatened a further round of tariffs on $300bn of Chinese goods.
The combined total of over $500bn of goods would cover virtually all Chinese imports into the United States. The US Trade Representative’s office initially had set a deadline for final public comments on the 10% proposed tariffs to be filed by August 30, with public hearings scheduled for August 20-23. It typically has taken several weeks after the close of public comments for the tariffs to be activated.
Sources and photo-credits: Bloomberg, Gulf Times