President Trump has announced the execution of $50 billion in new tariffs on Chinese goods. “In light of China’s theft of intellectual property and technology and its other unfair trade practices,” the United States will implement a 25 percent tariff on an array of goods from China “that contain industrially significant technologies,” he said in a statement released on Friday.
“This includes goods related to China’s Made in China 2025 strategic plan to dominate the emerging high-technology industries that will drive future economic growth for China, but hurt economic growth for the U.S. and many other countries,” Trump added.
“My great friendship with President Xi of China and our country’s relationship with China are both very important to me,” he said. “Trade between our nations, however, has been very unfair, for a very long time. This situation is no longer sustainable. China has, for example, long been engaging in several unfair practices related to the acquisition of American intellectual property and technology.”
These practices were documented in a March report by the United States Trade Representative (USTR).
“These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs,” Trump said. “In addition, they will serve as an initial step toward bringing balance to the trade relationship between the U.S. and China. The U.S. will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China.”
Among the complaints and allegations made against China by Trump and his administration:
China imposes much higher tariffs on U.S. exports than it imposes on China.
China’s average tariff rate is nearly three times higher than the average U.S. rate.
Certain products are even more imbalanced, for instance the U.S. charges a 2.5 percent tariff on Chinese cars, while China currently maintains a 25 percent tariff on cars from the U.S.
China has banned imports of U.S. agricultural products such as poultry.
China has dumped and unfairly subsidized a range of goods for the U.S. market, undermining America’s domestic industry.
In 2018, the administration has found dumping or unfair subsidies on 13 different products, including steel wheels, cold-drawn mechanical tubing, tool chests and cabinets, forged steel fittings, aluminum foil, rubber bands, cast iron soil pipe and fittings, and large diameter welded pipe.
In January 2018, the administration determined that China’s overproduction of steel and aluminum, and the resulting impact on global markets, “is a circumstance that threatens to impair America’s national security.”
The U.S. has run a trade in goods deficit with China for years, including a $375 billion deficit in 2017 alone.
On Friday, the USTR released the list of products imported from China that will be subject to additional tariffs.
The list covers 1,102 separate U.S. tariff lines valued at approximately $50 billion in 2018 trade values. This list was compiled based on extensive interagency analysis and a thorough examination of comments and testimony from interested parties. It generally focuses on products from industrial sectors that contribute to or benefit from the “Made in China 2025” industrial policy, which include industries such as aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles. The list does not include goods commonly purchased by American consumers such as cellular telephones or televisions.
This list of products consists of two sets of U.S. tariff lines. One covers 818 product lines and approximately $34 billion worth of imports from China that USTR has imposed an additional duty of 25 percent on. Customs and Border Protection will begin to collect the additional duties on July 6, 2018.
Included on the list are products and parts used for: aircraft parts; agricultural and horticultural machinery; hydraulic turbines and water wheels; parts of stock pumps for use with machines for making cellulosic pulp, paper, or paperboard; compressors used in refrigerating equipment, including air conditioning; industrial or laboratory furnaces and incinerators; catalytic converters; can-sealing machines; machinery for packing or wrapping pipe tobacco, candy, and cigarette packages; appliances for projecting, spraying liquids or powders, used for making printed circuits or printed circuit assemblies; derricks, cranes and other lifting machinery; forklifts; pneumatic elevators, and conveyors; bulldozers, tamping machines, and road rollers; coal or rock cutters; metallurgy equipment; grinding, sanding, or polishing machines for working wood, cork, bone, hard rubber, or hard plastics; and many other products and machinery parts used in manufacturing.
The second set contains 284 proposed tariff lines identified as benefiting from Chinese industrial policies, including the “Made in China 2025” industrial policy. These cover approximately $16 billion worth of imports from China and will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, the USTR will issue a final determination on the products from this list that would be subject to the additional duties.
In the coming days, the USTR will provide an opportunity for the public to request the exclusion of particular products from the additional duties. It will issue a notice in the Federal Register with details regarding this process within the next few weeks.
In response to the trade measures, China’s Ministry of Commerce described the announcement as “provoking a trade war.”
“China and the U.S. have conducted several rounds of consultations on economic and trade issues in an effort to resolve differences and achieve a win-win situation,” the statement says. “We deeply regret that the U.S. has disregarded the consensus it has formed and is fickle, provoking a trade war. This move is not only damaging bilateral interests, but also undermining the world trade order. China firmly opposes this.”
“China does not want to fight a trade war, it added. “However, in the face of the short-sighted behavior that the United States has done against people, China has to respond strongly and firmly defend the interests of the country and the people, and resolutely safeguards economic globalization and the multilateral trading system. We will immediately introduce taxation measures of the same scale and the same strength. All the economic and trade achievements previously reached by the two parties will be invalid at the same time. In today’s era, launching a trade war is not in the global interest. We call on all countries to take joint action, resolutely put an end to this outdated and regressive behavior, and firmly defend the common interests of mankind.”