US to slap new tariffs on goods worth US$34 billion on China, heating up trade war as Beijing promises retaliation
America’s targets include many types of plastics and other intermediate goods used in manufacturing, as well as some capital goods
This story is being published by the South China Morning Post as part of a content partnership with POLITICO. It was reported by Doug Palmer and originally appeared on politico.com on July 5, 2018.
An additional 25 per cent tariff on about $34 billion worth of Chinese goods will be imposed as of midnight, the Office of the US Trade Representative confirmed Thursday.
A USTR spokeswoman said US Customs and Border Protection has been instructed to begin collecting the duties, which President Donald Trump ordered earlier this year after a USTR Section 301 investigation blamed China for the loss of US valuable intellectual property, either through forced technology transfers or outright theft.
Earlier today in Beijing, Chinese officials said they were prepared to respond with duties on an equivalent amount of exports once the United States imposed its tariffs.
Commerce Ministry spokesman Gao Feng warned the proposed US tariffs would hit international supply chains, including many foreign companies operating in China, Reuters reported.
The US list of Chinese goods targeted for additional tariffs includes many types of plastics and other intermediate goods used in manufacturing. Some capital goods are also included. The list was deliberately constructed to minimise the impact of tariffs increases on US consumers, US trade officials said.
The Chinese list of US goods for retaliatory action includes soybeans, seafood and other food and agricultural products.
The Trump administration is also preparing to hit another US$16 billion worth of Chinese exports with additional duties once it completes a public comment period. That could be as early as August.
Beijing has also prepared a list of another US$16 billion worth of US goods that it will hit with duties in response to that.
In addition, the conflict could grow from there because Trump has ordered US trade officials to draw up a list of an additional US$200 billion worth of Chinese goods to hit with an extra 10 per cent duty if China retaliates as expected.