US Imposes New $200bn Tariffs On China
The US is imposing new tariffs on $200bn (£150bn) worth of Chinese goods as it escalates its trade war with Beijing.
The higher import taxes will apply to more than 5,000 items, marking the biggest round of US tariffs so far.
Handbags, rice and textiles will be included, but some items expected to be targeted such as smart watches and play pens have been excluded.
China has previously vowed to retaliate against any further US tariffs.
The taxes will take effect from 24 September, starting at 10% and increasing to 25% from the start of next year unless the two countries agree a deal.
President Donald Trump said the latest round of tariffs was in response to China’s “unfair trade practices, including subsidies and rules that require foreign companies in some sectors to bring on local partners.
“We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly.
“But, so far, China has been unwilling to change its practices,” he said.
He also warned that if China retaliated then the US would “immediately pursue phase three” which would mean imposing further tariffs with taxes on another $267bn worth of Chinese products.
If he does go ahead with a further $267bn worth of tariffs, it would mean virtually all of China’s US exports would be subject to new duties.
While economists generally estimate that the overall economic impact of the tariffs will be a fraction of a percentage point, they caution that the effects are difficult to predict.
What items have been targeted?
The list slated for tariffs originally included more than 6,000 items, but US officials said they had removed about 300 types of items.
Those included high-profile consumer products, such as smart watches, bicycle helmets, play pens and baby car seats.
The changes come after fierce opposition from companies, including global tech giants such as Apple, Dell and Hewlett Packard Enterprise.
The firms are worried the tariffs will increase their costs since many of their products are manufactured in China.
Hasn’t the US already imposed tariffs?
Yes, it has. In fact, this latest round marks the third set of tariffs put into motion so far this year.
In July, the White House increased charges on $34bn worth of Chinese products. Then last month, the escalating trade war moved up a gear when the US brought in a 25% tax on a second wave of goods worth $16bn.
However, this latest round is the biggest to date, and unlike the earlier rounds this latest list targets consumer goods, such as luggage and furniture.
That means regular households may start to feel the impact.
US companies have already said they are worried about the effect of higher costs on their businesses.
Officials said they wanted to shield consumer goods from the taxes as much as possible.
However, some products that help computer networks operate, such as routers, remain on the latest list.
Why is the US doing this?
The White House says its tariffs are a response to China’s “unfair” trade policies.
In theory, the tariffs will make US-made products cheaper than imported ones, so encourage consumers to buy American. The idea is they would boost local businesses and support the national economy.
US officials hope the risk of economic harm will convince the Chinese government to change its policies.
However, many US businesses are critical of the tariffs.
Farmers, manufacturers, retailers and other industry groups have formed a coalition to oppose the tariffs, calling them taxes on American families.
“Tariffs have already resulted in layoffs, and this escalation will continue to squeeze American businesses with higher input costs and American farmers with decreasing commodity values,” said Jonathan Gold, a spokesman for the coalition.
How has China responded?
The Chinese have previously hit back with tariffs on $50bn worth of US products in retaliation, targeting their response against key parts of the president’s political base, such as farmers.
The government has outlined a plan to impose further tariffs on roughly $60bn worth of US goods, and threatened other measures.
Are the two sides talking?
Not really.
Talks between high-level officials ended in May without resolving the matter. Efforts to re-start discussions have failed to progress.
US and China officials had discussed a new round of talks over the past week, but President Trump’s latest move is likely to sour relations further.
Mr Trump’s economic adviser, Larry Kudlow, earlier said it was still happy to talk: “We are ready to negotiate and talk with China anytime they are ready for serious and substantive negotiations,” he said.
BBC
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