China-US Trade War Escalated by New Tariffs


Trump administration made an announcement on Monday September 17 that it will levy tariffs on $200bn in Chinese goods starting next week at 10 percent, and that will rise to 25 percent on 1 January 2019.

After giving due consideration of public comments, the Trump administration said this list of $200bn had already been revised and nearly 300 categories of items had been removed, including iPhone, smart watches and some other consumer electronics products.

Mr. Trump has already slapped a hefty 25 percent duties on $50 bn worth of Chinese goods, of which, tariffs on the $34bn took effect on July 6, and that on another $16, August 23. China has matched in that round, targeting, among other American goods, corn and soybeans, mainly produced in the US farm belt  where the president won much support during the 2016 election.

trade war - China-US Trade War Escalated by New Tariffs

Source: DFIC

On the same day, Mr. Trump threatened to impose tariff on another $267bn worth of Chinese goods if Beijing should take any retaliatory measures. That would raise the total of three rounds of tariffs to $517bn (almost the same worth of Chinese exports to the US in 2017-$524bn) and nearly leave no Chinese goods untouched by US tariffs.

Read Also: US-China Trade War Pushes Consumer Technology into the Fire

“China has had many opportunities to fully address our concerns,” Mr. Trump said in a statement. “Once again, I urge China’s leaders to take swift action to end their country’s unfair trade practices.” At the same time, he expressed his willingness to work things out through negotiations.

America’s huge trade deficit with China (about $336bn in 2017) is also what Mr. Trump complains about. Chinese vice premier Liu He paid a visit to the US in May amid the ZTE incident and rising trade tension, Mr. Liu and US treasury secretary Steven Mnuchin had worked toward a truce on China’s promise to buy more farm products and LNG from America to help balance the deficit. However, Mr. Trump backed away from the truce and followed through his tariff plans.

China’s Foreign Ministry spokesman Geng Shuang said on Monday that, China will take any necessary countermeasures and safeguard its legal rights and interests.

Read Also: No Winner of Trade War: Trump’s Tariffs Are Straining the Global Economy

US businesses and industrial groups voiced their opposition during six days of hearings regarding new tariffs on Chinese goods last month. California-based Giant Bicycles Inc, who has 94 percent of its imported bicycles from China in 2017-complained that they have no way to shift its supply chain to a new market comparable to China, and tariff increase will finally be passed on to consumers.The United States Council for International Business said individuals and companies are still feeling the impact of earlier tariffs, new tariffs worsen the pain.

The new tariffs also lead to cost increase and uncertainties for companies having supply chains spanning the Pacific Ocean, some of them are considering leaving China to avoid the tariffs and looking to other low-cost countries that are not involved in the trade fire.


Please enter your comment!
Please enter your name here