The U.S.-China trade war is escalating, and that means risk mitigation efforts for companies across all industries is escalating, as well.
On June 18, President Donald Trump directed the United States Trade Representative (USTR) to identify $200 billion worth of Chinese goods for additional tariffs, at a rate of 10 percent. These tariffs would be in addition to the tariffs that the Trump administration recently imposed on $50 billion worth of imports from China, at a rate of 25 percent, intended to “encourage China to change the unfair practices identified in the Section 301 action with respect to technology and innovation,” President Trump stated.
China immediately retaliated by imposing its own tariffs on $50 billion worth of U.S. exports, provoking President Trump to request that the additional $200 billion in tariffs be imposed. “China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology,” Trump stated. “Rather than altering those practices, it is now threatening U.S. companies, workers, and farmers who have done nothing wrong.”
Following completion of the legal process, the additional tariffs on Chinese imports will take effect, “if China refuses to change its practices and, also, if it insists on going forward with the new tariffs that it has recently announced,” President Trump stated. “If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200 billion of goods. The trade relationship between the United States and China must be much more equitable.”
“This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods,” President Trump stated. “This is unacceptable. Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States.”