26 Aug 2019
Trump Announces Hike of Five Percentage Points in Additional Tariffs on Mainland Chinese Products
President Trump tweeted on 23 August that the additional duties that are currently in place under Section 301 on some US$250 billion worth of imports from mainland China (comprising goods in Lists 1, 2 and 3) will be hiked from 25 percent to 30 percent effective 1 October, while the additional tariffs that are slated to be implemented on 1 September and 15 December on most remaining imports from the mainland will be set at 15 percent in lieu of 10 percent. The Office of the U.S. Trade Representative will soon publish in the Federal Register additional details on these actions.
Trump sent a separate tweet earlier in the day where he “ordered” U.S. companies to “to immediately start looking for an alternative to China” and bring back production to the United States. He later claimed that he has the “absolute right” to require U.S. companies to stop doing business in mainland China under the International Emergency Economic Powers Act of 1977, which the president cited earlier this year when he threatened to impose tariffs starting at five percent on all imports from Mexico. In yet another tweet, Trump “ordered” al carriers, including Amazon and two major U.S. express services companies, to “search for & refuse…all deliveries of Fentanyl from China (or anywhere else!).” Later in the day, the White House announced various actions to crack down on international fentanyl trafficking.
Trump’s announcements came in response to plans by mainland China to increase tariffs on more than 5,000 additional goods imported from the United States as retaliation for the president’s decision to impose additional tariffs on most remaining imports from the mainland. Beijing said it will levy additional tariffs of 5 or 10 percent on a total of 5,078 U.S. items with an import value of about US$75 billion. These tariffs will take effect on 1 September for roughly one-third of the affected goods and on 15 December for the remainder. In addition, mainland China plans to impose tariffs of 25 percent and 5 percent on imports of U.S. automobiles and auto parts, respectively, beginning on 15 December.
The U.S. decision to hike the additional Section 301 duties by five percentage points was blasted by a number of U.S. business associations. American Apparel & Footwear Association President and CEO Rick Helfenbein stated in a 23 August press release that “clearly the Trump administration’s use of tit-for-tat tariff hikes are not part of any coherent strategy for China” and instead represent “a 1930s trade strategy that will be a disaster for American consumers, American businesses, and the American economy.” The U.S. Chamber of Commerce, meanwhile, urged the two sides to “return to the negotiating table to complete an agreement that addresses concerns over technology transfer practices, intellectual property enforcement, market access, and the globally damaging impact of Chinese domestic subsidies.”