In the escalating US-China Trade war, US President Donald Trump announced 10% tariffs on $200 billion of Chinese goods, which are to come into effect on September 24th.
Nearly 200 pages long, the list covers almost 6,000 individual items. Some are quite common, such as coal, printing ink, pneumatic tires and spark plugs. Others are more exotic, from live eels and frogs’ legs to rail locomotives and chandeliers.
This comes in addition to tariffs on approximately $53 billion of Chinese goods. China retaliated with tariffs on $53 billion of US goods.
Trump also threatened for the tariffs to be raised to 25% in 2019 if no deal is reached to ease trade tensions between the countries. He also threatened of tariffs on another roughly $267 billion more if China retaliated against the US action.
On September 18th, China said that Trump had “forced its hand” and that there would be a retaliation, as announced by a Chinese Commerce Ministry Statement.
The brief statement gave no details on China’s plans, but Foreign Ministry spokesman Geng Shuang told a daily news briefing later that the U.S. steps had brought “new uncertainty” to talks between the two countries.
“China has always emphasized that the only correct way to resolve the China-U.S. trade issue is via talks and consultations held on an equal, sincere and mutually respectful basis. But at this time, everything the United States does does not give the impression of sincerity or goodwill,” he added. Geng said he would not comment on “hypotheticals” such as what measures Beijing might consider apart from tariffs on U.S. products, saying only that details would be released at the appropriate time.
Fang Xinghai, vice chairman of China’s securities regulator, also claimed that China wouldn’t cave in to these latest tariffs.
Speaking at the port city of Tianjin, Fang criticised Trump’s negotiating strategy, saying: “President Trump is a hard-hitting businessman, and he tries to put pressure on China, so he can get concessions from our negotiations. I think that kind of tactic is not going to work with China.”
He also added that he hopes the two sides can talk but warned that the latest US move has “poisoned” the atmosphere, as cited by Reuters.
In August 2018, China unveiled a proposed list of tariffs on $60 billion of U.S. goods ranging from liquefied natural gas to certain types of aircraft – should Washington activate the tariffs on its $200 billion list.
China is also reviewing plans to send a delegation to Washington for fresh talks in light of the US action, the South China Morning Post reported on Tuesday, citing a government source in Beijing.
The price of oil dipped after the announcement of the new sanctions. Brent crude has fallen to $77.78 per barrel, down 0.35% on September 18th. Wang Xiao, head of crude research at Guotai Junan Futures, blamed the US-China trade war: “The growing trade dispute has hurt trading sentiment. The impact on economic growth is slowly dripping in, which again hurts oil prices,”
America’s Information Technology Industry Council (ITI), which represents major tech firms, was quick to criticise these new tariffs.
ITI president Dean Garfield said Trump’s decision was “reckless,” and would hurt US communities: “China must change, but this is not the way to achieve the needed market access in China. More tariffs not only punish American consumers, manufacturers, and businesses of all sizes, they will also diminish the opportunity to negotiate with the Chinese and address longstanding trade issues. If implemented, these tariffs will have both short- and long-term effects on the United States – from increased prices at the checkout counter to decreased leadership on the emerging technologies that will shape our future.” The US Retail Industry Leaders Association also condemned the decision.
Europe’s trade commissioner Cecilia Malmström also criticized Trump’s new tariffs. The Guardian cited her calling the tariffs “very unfortunate.”
She also disputed Trump’s claim earlier this year that trade wars are “good and easy to win.”
“This escalation is very unfortunate”, Cecilia Malmstrom, the EU’s trade commissioner, told reporters. Trade wars are not good and they are not easy to win. […] We agree with some of the criticism the US has advanced vis-à-vis China”, Ms Malmstrom said. “But we disagree with the methods the US is using.”