If tariffs and complaints about tariffs were a commodity, trade in them would be spectacular these days.
On June 15, the Office of the U.S. Trade Representative (USTR) released two lists of Chinese technological goods targeted for added 25 percent tariffs estimated as worth $50 billion. After the weekend, on June 18, President Donald Trump additionally directed the USTR to identify another $200 billion worth of Chinese goods as potential targets for an added 10 percent tariff “to address China’s harmful trade policies and practices.”
Both moves are “part of the U.S. response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property,” according to the USTR announcement.
“Technology and innovation are America’s greatest economic assets and President Trump rightfully recognizes that if we want our country to have a prosperous future, we must take a stand now to uphold fair trade and protect American competitiveness,” said U.S. Trade Representative Robert Lighthizer.
“China’s government is aggressively working to undermine America’s high-tech industries and our economic leadership through unfair trade practices and industrial policies like ‘Made in China 2025.’”
The lists include 1,102 total imported goods from China, most of them technological in nature. The first list includes 818 items. A 25 percent tariff on these items, set to take effect July 6, is valued at $34 billion.
The second list includes 284 items identified as part of, or benefiting from, China’s “Made in China 2025” industrial policy. The estimated $16 billion in tariffs that would stem from a 25 percent tariff on these items are still under review.
On Tuesday, June 19, the Chinese Ministry of Finance announced in-kind retaliatory tariffs. Claiming that the U.S. tariffs “violate the relevant rules of the World Trade Organization” and threaten China’s “legitimate rights and interests” (as per a Google translation from Chinese), the Ministry announced 25 percent tariffs on 545 U.S. items, valued at $34 billion, set to go into effect on July 6. An additional $16 billion in tariffs on 114 other U.S. items “shall be announced separately.”
The Chinese announcement claimed the first list of targeted items includes “agricultural products, automobiles, and aquatic products.” The second list reportedly includes “chemical products, medical equipment and energy products.”
WLJ was not able to access the June 19 lists of targeted goods apparently put forth by the Ministry. This may be a result of the “Great Firewall of China,” which restricts internet access into or out of China.
Past lists of proposed tariff targets released by the Chinese Ministry of Finance that WLJ was able to access included soybeans, corn, cotton, sorghum, distillers’ grains, wheat, and every form of beef and beef variety meat currently accepted by China.
Recent history
Though the USTR’s claims that tariff action against China is a strike back against its technology and intellectual property rights policies, the $50 billion in tariffs against Chinese technological goods was first proposed during a string of tariff-related sabre rattling involving washers, metal, pork, beef, and all sorts of other goods.
In late January, safeguard tariff rate quotas were issued against Chinese washing machines and solar cells. China initiated a dispute complaint with the World Trade Organization (WTO) over this barely two weeks later.
In early March, Trump proposed world-wide import tariffs on steel and aluminum imports in the interest of “national security.” In early April, China was the first country to issue a dispute complaint with the WTO over the tariffs. As of printing, five other countries have done the same.
Not even a week after proposing them, China implemented an estimated $3 billion in tariffs against U.S. goods on April 2, targeting agricultural goods and pork in particular.
The very next day, on April 3, the USTR announced it would present U.S. stakeholders with a list of proposed tariff targets valued at an estimated $50 billion. The list of proposed targets was published on April 6. The list announced on June 15 that will take effect on July 6 is the result of this initial proposal and comment period.
On April 4, the Chinese Ministry of Finance announced an in-kind tariff response of $50 billion. The lists announced on June 19 are likely the same as or very similar to that April 4 list.
On April 5, Trump proposed an additional $100 billion in tariffs on Chinese goods. China responded the same day, with a spokesman from the Chinese Ministry of Commerce saying: “[We] will follow suit to the end and will not hesitate to pay any price and will definitely fight back.”
On April 18, China announced a 179 percent tariff on U.S. sorghum, claiming it was to combat U.S. dumping of sorghum into the Chinese market. U.S. Secretary of Agriculture Sonny Perdue flatly rejected this claim.
Throughout this process, China has repeatedly claimed it will match U.S. tariffs with a pattern of targeting U.S. agricultural goods. Both countries’ trade officials and leaders have maintained that the tariffs of the other are unjust, protectionist, and damaging to their country’s interests. WLJ will continue following this as it develops. — Kerry Halladay, WLJ editor
“[China] will follow suit to the end and will not hesitate to pay any price and will definitely fight back.”
