The US has announced its plans to impose taxes on a further $US200 billion ($270 billion) worth of Chinese imports, in retaliation for China’s retaliation to America’s first round of tariffs.
- The US releases a 195-page list of Chinese imports worth $US200b a year that will be hit with a 10pc tariff
- The tariffs may take effect from September, following a consultation process
- US trade representative Robert Lighthizer says the US is willing to negotiate with China on trade practices
The office of US Trade Representative Robert Lighthizer has released a list of Chinese products, running to almost 200 pages, that will potentially be hit with a 10 per cent import tax as early as September.
This builds on 25 per cent tariffs on $US34 billion ($46 billion) worth of Chinese imports into the US that took effect at midnight on Friday, and carries out US President Donald Trump’s threat to respond to any Chinese retaliation to those taxes.
Chinese authorities implemented tit-for-tat tariffs on key US exports into China, including some major agricultural products.
The US is planning to implement 25 per cent tariffs on a further $US16 billion ($22 billion) worth of Chinese imports within the next fortnight.
Mr Lighthizer said the products targeted by the tariffs are those that benefit from China’s industrial policy and forced technology transfer.
“For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition,” he said in a statement.
“We have been very clear and detailed regarding the specific changes China should undertake.
“Unfortunately, China has not changed its behaviour — behaviour that puts the future of the US economy at risk.
“Rather than address our legitimate concerns, China has begun to retaliate against US products. There is no justification for such action.”
However, Mr Lighthizer also opened the door again to a negotiations with China before the latest round of tariffs take effect.
“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 US goods and services,” he added.
“In the meantime, we will remain vigilant in defending the ability of our workers and businesses to compete on a fair and reciprocal basis.”
The Office of the US Trade Representative is seeking submissions on the latest proposed tariffs and will conduct hearings in late August, making September the earliest possible implementation date for the new import taxes.
‘Everyone loses in a trade war’
The new import imposts are likely to face stiff domestic opposition from many business groups, Democrats and some Republicans.
Reuters quoted the Republican chairman of the Senate’s Finance Committee, Orrin Hatch, saying it “appears reckless and is not a targeted approach”.
The US Chamber of Commerce, a supporter of the President’s tax cuts and deregulation moves, also slammed the new tariff proposals.
“Tariffs are taxes, plain and simple,” a chamber spokeswoman told Reuters.
“Imposing taxes on another $200 billion worth of products will raise the costs of everyday goods for American families, farmers, ranchers, workers, and job creators.
“It will also result in retaliatory tariffs, further hurting American workers.”
Weird tariff targets
Now that the Trump administration is planning to put tariffs on around half of the US imports from China it has had to tax some pretty random goods. Here’s ten of the weirdest:
- Bovine semen
- Oxygen and carbon dioxide
- Bidets and lavatory pans
- Labels and badges
- Vinyl tile floor coverings
- Knives and crowbars
- Passenger boarding bridges (for planes)
- Farm wagons and carts, not mechanically propelled
- Parking meters
- Time of day recording apparatus
The fresh tariffs affect thousands of imports, including many chemicals, apparel, many domestic appliances, fruit and vegetables, tyres and many other common household and industrial goods.
US Studies Centre senior fellow Jared Mondschein said the reason so many goods are being targeted is because the US will be placing tariffs on about half its total imports from China.
“At this point, they’re coming to the end of the line,” he told ABC News.
“There are only so many exports that can be targeted.”
Mr Mondschein said that, “ultimately everyone loses in a trade war”, and the Trump administration would have been better off pursuing its case legally through the World Trade Organisation (WTO).
“The most perverse outcome in all this is the fact that China looks like it is going to have a very good WTO case against the United States,” he said.
“This is despite the fact that China has, for many years, completely ignored and outright challenged WTO principles — whether it be on state-owned enterprises and unfair competition, or whether it be forced joint ventures when you invest in China, or flooding the market — there’s so many different areas where the US has a legitimate case against China.
“But the US doing this trade war erodes that and also erodes the increasingly international, and previously coordinated, position with Europe and other allies that was against China.”
Aussie dollar, shares slide on trade war escalation
The confirmation that the Trump administration would proceed with its threat to escalate tariffs in response to any Chinese trade retaliation was met with falls for shares and the Australian dollar.
Australia’s benchmark ASX 200 share index was off 0.7 per cent by 11:11am (AEST), with most major sectors in the red.
The Australian dollar likewise took a hit on the escalating trade war between the nation’s two major trading partners.
It was down around half a per cent against the US dollar at 74.13 US cents, with an even bigger fall against the Japanese yen.
AxiTrader’s chief market strategist Greg McKenna said the local currency faces a steep wall of worries.
“The negatives [are] stacking up against the Aussie dollar — things like the trouble in emerging markets, an apparent slowing in the Chinese economy, domestic headwinds for households and potentially business, interest rate differentials, commodity prices, the performance of metals and mining shares versus the overall market, and the still unresolved trade war between the US and China,” he wrote in a note.
“Markets remain too sanguine for my liking.”
By Michael Janda