U.S. Assesses 10% Tariffs on $200 Billion More in Chinese Imports

Posted on 07/11/2018 4:58 AM

China reacts angrily | No official discussions between two countries slated


The budding U.S./China trade war just got another volley as the Trump administration on Tuesday announced it would assess 10% tariffs on a further $200 billion in Chinese goods. Those tariffs will take place in around two months, giving the two countries time for a resolution, but no meetings to that effect have been scheduled. China reacted angrily to the White House/USTR announcement.

 

The White House on Tuesday said it would assess 10% tariffs on a further $200 billion in Chinese goods, but they won't take effect for at least two months, giving time for public comment; hearings on the products are scheduled for Aug. 20-23. The new round of tariffs comes on top of two others ($34 billion which went into effect Friday and another $16 billion to follow). President Trump’s latest action will hit consumer products such as televisions, clothing, bedsheets and air conditioners, which were spared from the first import levies on Friday. Tuesday’s announcement included a 205-page public notice and list of the individual products that could be hit by the new 10% tariffs (link).

Background. President Trump asked the U.S. Trade Representative (USTR) on June 18 to consider an additional $200 billion in tariffs after China said it would pursue retaliation if the U.S. made good on its threat of duties on Chinese imports. The Trade Representative’s Office on Tuesday said it will hold public hearings Aug. 20-23 on the products and goods it proposes to impose tariffs on. A final decision on the tariffs will be made after Aug. 30.

USTR Robert Lighthizer said he was open to talks with China about a resolution of the dispute. “As in the past, the United States is willing to engage in efforts that could lead to a resolution of our concerns about China’s unfair trade practices and to China opening its market to U.S. goods and services,” he said in a statement (link). Lighthizer said the announcement was “an appropriate response.” “Rather than address our legitimate concerns, China has begun to retaliate against U.S. products,” he said. “There is no justification for such action.”

We gave China many, many opportunities to come in and talk to us and negotiate some of the concerns we raised here and in Beijing,” an administration official said in a background briefing with reporters. The official said Beijing’s imposition of $34 billion in tariffs on U.S. imports on July 6 was an unjustified response to $34 billion in U.S. tariffs imposed on 818 product lines of Chinese imports the same day. An additional $16 billion in tariffs on Chinese imports are undergoing review. The senior official, who is unnamed as a condition for the briefing, said the U.S. duties were levied as part of a lawful procedure under Section 301 of the Trade Act of 1974. China’s action had no legal justification and represented a tit-for-tat response, the official said. “The appropriate action on China’s part would have been to engage seriously with us and negotiate seriously with us and try to find a way to solve and address some of our concerns and end the harm that was being caused by China’s unfair trade practices,” the senior official said.

There are currently no negotiations scheduled. A senior White House official said on Tuesday evening that the administration welcomed China’s engagement and had been “extremely clear” with China about its concerns over its trade practices, but that China had been “nonresponsive.” A senior administration official who briefed reporters Tuesday on the condition that he not be identified added: “We do intend to keep the pressure on them.”

China reacted angrily, calling the move a “totally unacceptable” escalation and vowing to roll out unspecified countermeasures. “They go low, we go high,” said Li Chenggang, an assistant minister at China’s Ministry of Commerce, employing a slogan popularized in the 2016 presidential campaign by former First Lady Michelle Obama. “There is a proverb in the West, ‘like a bull in a China shop,’” said Li. “The U.S. approach undermines the process of globalization and undermines the trade order.”

A Chinese Commerce Ministry statement said China was “shocked” at the U.S. plans to levy the 10% tariffs. It described the release of the target list as an “accelerated escalation” that displayed a “loss of reason.” The Commerce Ministry said as in the past the Chinese government “has no choice but to take necessary countermeasures,” though it didn’t elaborate. Beijing will rally the international community, the statement said, to “jointly oppose trade bullying.” It said China would immediately file a complaint about the U.S.’s “unilateral action” with the World Trade Organization.

Beijing recently unveiled measures to help Chinese companies absorb the U.S. trade announcements, pledging to funnel money collected from its own import levies to firms and workers tangled in the escalating trade war. Chinese officials also encouraged businesses to reduce their reliance on U.S. goods, urging them to shift orders for products such as soybeans and auto­mobiles to suppliers in China or countries other than the United States. “For companies that are severely impacted, we suggest they report to local government departments,” the Commerce Ministry said in a statement Monday.

Congress reacts. Senate Finance Committee Chairman Orrin Hatch (R-Utah) said he opposed additional tariffs. “Although I have supported the administration’s targeted efforts to combat China’s technology transfer regime, tonight’s announcement appears reckless and is not a targeted approach,” he said in a statement. "We cannot turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy."
 


 

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