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June 15, 2018

U.S. Officially Slaps China With Significant Tariffs

By  Rachel Ramirez

President Donald Trump is moving ahead with 25% tariffs on $50 billion worth of Chinese goods. On Friday, the White House released a full list of items and products that are being targeted, focusing mainly in China’s aerospace, robotics and machinery industries.

After months of exchanging threats amid a potential trade war between the world’s two largest economies, the United States Customs and Border Protection will begin collecting tariffs on the first $34 billion Chinese imports on July 6, after which another round of taxes will likely be imposed.

“We must take strong defensive actions to protect America’s leadership in technology and innovation against the unprecedented threat posed by China’s theft of our intellectual property, the forced transfer of American technology, and its cyber attacks on our computer networks,” said U.S. Trade Representative Robert Lighthizer.

China already announced its plans to retaliate by immediately imposing penalties and tariffs of the same scale on U.S. products, according to the Associated Press. These products range from soybeans, whiskey and meat to airplanes and automobiles. China also hopes to garner potential support against the U.S. from other Asian and European countries.

President Trump said, in a statement, that trade between the two countries has been historically “very unfair, for a very long time,” and that the U.S. will add more tariffs if China decides to retaliate.

The first targeted list includes several items used to produce promotional products, like “cylinders for textile calendering,” prints and filters, rolling machines, “sorting, screening, separating or washing machines,” molding patterns, LEDs and more.

A prolonged trade war between the U.S. and China could prove challenging for the promo market, as prices on Chinese-made imported goods would increase. Firms would then have to decide whether to take a hit in their margins or pass the added cost onto buyers.

A second list of products, containing 284 proposed tariffs, is set to undergo a full review and a public hearing. An official statement by the USTR states that it “recognizes that some U.S. companies may have an interest in importing items from China that are covered by the additional duties,” by which USTR will make exceptions on particular products and will issue more details regarding the process within the next few weeks.

“If the U.S. takes unilateral and protectionist measures and harms our interests, we will take action immediately and take necessary measures to protect our legitimate rights,” Geng Shuang, a Chinese foreign ministry spokesperson, said at a briefing on Friday.

Trump’s plans to proceed with the tariffs has reportedly put a wedge between him and some of his closest advisers, who are concerned about the fallout from a trade war. Some U.S. senators, including Orrin Hatch, criticized the U.S. trade actions, calling them harmful. The U.S. Chamber of Commerce has also denounced the tariffs.