On Monday, Sept. 17, the Office of the U.S. Trade Representative (USTR) announced $200 billion in tariffs against Chinese imports were ready for implementation.
Effective Sept. 24, the tariffs will start at 10 percent on 5,745 full or partial lines of the original 6,031 tariff lines released for public comment in August. The items removed from that initial list composed mostly consumer electronic products, chemicals for manufactured goods and agriculture, and safety items such as playpens and bicycle helmets.
The remaining list targets just about every conceivable form of seafood and produce sourced from China, as well as manufactured and manufacturing goods and components, industrial items, cosmetics, and many other items. The tariffs will increase to 25 percent, effective Jan. 1, 2019 if China does not change its trading behavior.
As with previous rounds of tariffs against China, the USTR claimed the goal of these tariffs were to eliminate “China’s harmful acts, policies and practices.”
“Unfortunately, China has been unwilling to change its policies involving the unfair acquisition of U.S. technology and intellectual property,” the USTR said in its announcement of the $200 billion in tariffs.
“Instead, China responded to the United States’ tariff action by taking further steps to harm U.S. workers and businesses. In these circumstances, the president has directed the U.S. Trade Representative to increase the level of trade covered by the additional duties in order to obtain elimination of China’s unfair policies.”
In a tweet the day of the announcement, President Donald Trump said that, “If countries will not make fair deals with us, they will be ‘Tariffed!’”
According to reports by several mainstream news outlets, including the Wall Street Journal and Reuters, China’s Commerce Ministry announced it would impose retaliatory tariffs of 5-10 percent on $60 billion worth of U.S. goods. The targeted list reportedly includes mostly automotive-related goods, parts, and materials.
As reported last week, Trump has mentioned another $267 billion in tariffs against China are “ready to go on short notice, if I want.”
Though the earlier announcement of the $267 billion in potential tariffs seemed to cause the general markets to falter, last week’s announcement of the implementation of the $200 billion in tariffs had the opposite effect.
“The strength in the stock market (new all-time highs) following the announcement of the next round of tariffs against China suggests traders may have come to realize that tariffs can spur economic growth—just as they have in China for several decades,” noted Andrew Gottschalk of Hedgers Edge.
“Domestic manufacturing is a beneficiary of these tariffs. It is being reported that there is currently a 500,000-shortfall of workers in the domestic manufacturing sector.” — WLJ
