Ships are docked at the Port of Long Beach, which handles a large portion of the goods shipped to the United States from China. (Marcio Jose Sanchez / Associated Press)
The Trump administration on Monday announced new tariffs on $200 billion of Chinese imports, a sharp escalation of its trade fight with China that will also exact costs on a wide range of American businesses and consumers.
The new tariffs, to take effect next Monday, would initially be set at 10% but climb to 25% in the new year. With Trump already having slapped 25% tariffs on about $50 billion of Chinese goods, the United States by next week will have imposed significant taxes on about half of all Chinese merchandise entering American borders.
Trump has said he is mulling even more tariffs on China. Beijing has previously said that it would respond with retaliatory tariffs on an additional $60 billion of U.S. imports.
Treasury Secretary Steven T. Mnuchin last week sent overtures to Beijing for renewed high-level trade talks possibly later this month, but Trump’s announcement Monday could scuttle the proposed meetings. As with the previous round, Trump issued the new duties based on the administration’s findings that China has long engaged in predatory economic behavior, including forcing U.S. firms to hand over technologies to have access to the large Chinese market.
“It looks like both sides are digging in for protracted tensions,” said David Loevinger, a managing director at TCW Emerging Markets Group in Los Angeles and formerly a senior Treasury Department official for China affairs.
The earlier round of tariffs, in two tranches, affected mostly Chinese machinery and industrial parts, intermediary materials and components largely invisible to consumers. But the new duties will ensnare roughly 5,000 products, including many ordinary household goods.
Other products subject to tariffs include such varied items as vacuum cleaners, baseball gloves and frozen fish. The U.S. Trade Representative issued a preliminary list of merchandise facing the new tariffs on July 10, but that was whittled down after U.S. officials received about 6,000 public comments and heard from about 350 witnesses over six days of hearings.
Among the 300 goods removed were smartwatches, such as the Apple Watch, and unspecified consumer electronic devices that use Bluetooth, as well as some chemicals used in manufacturing and agriculture, and consumer safety products such as bicycle helmets and child car seats.
Administration officials said they started with a 10% tariff rate to give businesses time to make adjustments before the 25% rate took effect. But while that could help some importers order more goods ahead of the higher duties, it will take companies a lot longer to shift supply chains or move production to avoid higher costs.
The officials said Trump is open to negotiations with China over its trade practices, but that no talks have been scheduled. Despite numerous conversations where U.S. officials have been clear about what they demand in order to avoid the tariffs, Chinese officials have not yet seriously engaged in talks, according to senior administration officials.
“We’ve given them chance after chance after chance,” said a senior administration official, in a briefing with reporters. “Up to this point they have remained obdurate.”
Trump has touted that the tariffs will generate billions of dollars in revenue from China. But tariffs are levied on the goods when they reach the U.S. and are paid by American importers at the border. Senior administration officials said Chinese companies in effect would swallow the cost if they lowered the prices of their goods so that the end cost to U.S. importers after the tariffs is the same.
Retailers and dozens of trade groups have urged Trump not to go through with the new tariffs, warning that they will wreak havoc on company supply chains and hurt consumers, who will inevitably face higher prices. Some have questioned the legality of Trump’s actions.
Besides U.S. importers, businesses that export to China also are almost certain to be subjected to additional retaliation from Beijing. Chinese officials responded to the earlier tariffs by issuing dollar-for-dollar duties on American imports, targeting farm goods for maximum political impact.
The Trump administration has argued that the tariffs it has imposed thus far have not hurt the broader American economy and that they are necessary for reforming an unfair trading system. U.S. soybean and other farmers have felt the pain in particular, although the White House has sought to soften the blow with emergency relief aid.
“The tariff story may be a very good force for good,” Trump’s economic adviser, Larry Kudlow, said Monday. “People want to blame President Trump for fixing a broken system.”
But even as businesses, politicians and former trade officials broadly agree on the need to address China’s mercantilist economic behavior, many have criticized what they view as Trump’s heavy-handed and often indiscriminate use of tariffs, directed at allies and adversaries alike.
Many worry that the escalating trade war will slow growth, hurt financial markets and destabilize the global economy. The Trump administration is betting that China, with its economy slowing and more dependent on exports than the United States, will acquiesce to American demands. Trump wants Beijing to take dramatic steps to reduce its trade deficit and halt unfair economic behavior such as discriminating against foreign firms and skirting international trading laws.
China experts, however, do not see Beijing backing down anytime soon. Chinese officials have taken steps that seem to be preparing for a protracted fight, easing what had been a tightening of bank credit and in some cases pushing domestic firms to pursue alternatives to the U.S. market.
Moreover, with Beijing having moved away from collective leadership to concentrated power in one man, President Xi Jinping, the central government is even less likely to capitulate, said Loevinger, of TCW Emerging Markets.
“The more the U.S. ramps up the pressure, the more it would make President Xi look weak if he’s perceived as caving in to the U.S.,” he said. Loevinger called Trump’s tariff policy a “sawed-off shotgun” approach to trade. “Plenty of other suppliers and workers will get hit, including in the U.S.,” he said of Trump’s new tariffs.
Susan Schwab, who served as U.S. trade representative in the George W. Bush administration, said she doesn’t like tariffs. But she also noted that China’s “bad behavior” has been going on for a long time and it is too early to judge whether Trump’s tariff strategy has been effective.
“This administration has gotten their attention,” she said at a forum Monday at the Center for Strategic and International Studies.
3:40 p.m.: This article was updated with Trump’s announcement.
12:40 p.m.: This article was updated with comments by President Trump.
This article was originally published at 12:20 p.m.
Bộ Ngoại giao Trung Quốc ngày 17/9 tuyên bố Bắc Kinh sẽ đáp trả nếu Hoa Kỳ thực hiện các biện pháp thuế quan mới đánh vào 200 tỷ đôla giá trị hàng hóa nhập khẩu từ Trung Quốc như Tổng thống Mỹ Donald Trump dự kiến sẽ công bố, theo hãng tin Reuters.
