Trump Administration to Impose $200 Billion in New Chinese Tariffs

The Trump administration announced it is imposing a 10 percent tariff on $200 billion worth of Chinese goods starting Sept. 24. That tariff could be raised to 25 percent at the beginning of the year if the Chinese continue with their “unfair trade practices.”

“As part of the United States’ continuing response to China’s theft of American intellectual property and forced transfer of American technology, the office of the United States Trade Representative today released a list of approximately $200 billion worth of Chinese imports that will be subject to additional tariffs,” the USTR said in a press release.

This is in addition to $50 billion in tariffs the U.S. imposed in July and August on mostly electronic goods. And Trump is threatening to add tariffs to another $200 billion in Chinese goods, which would cover just about everything the United States imports from that country.

The most recent tariffs cover some 5,745 items, which include textiles, handbags, yarns, embroidery, and leather and fur apparel as well as other goods including electronics, seafood, produce, cigarettes and beauty products. So far, apparel and footwear are not on the list. But they could be as the Trump administration threatens more tariffs.

Changes in the proposed list were made after the U.S. Trade Representative and the interagency Section 301 committee sought and received comments over a six-week period and testimony was held during a six-day public hearing in August about what should be excluded and included. After those hearings, 297 tariff lines—including certain health and safety products such as bicycle helmets, car seats and playpens—were removed from the proposed list.

The National Council of Textile Organizations successfully lobbied to remove rayon fiber and certain dyes and chemicals from the list. “The U.S. textile industry requested the exclusion of these products because they are not available domestically, and China is the only significant source of supply,” said Auggie Tantillo, the chief executive of the NCTO.

“Despite yesterday’s announcement, the U.S. textile industry remains of the belief that the administration’s strategy to impose tariffs on inputs is not the most effective approach to penalize China for its rampant abuses of intellectual-property rights in our sector,” Tantillo added. “Added tariffs on finished Chinese textile home furnishings and apparel is the most effective sanction the United States could impose on China because like products from the NAFTA [North American Free Trade Agreement] and CAFTA [Central American Free Trade Agreement] regions, using U.S.-made textile inputs immediately become more competitive, thereby incentivizing the re-shoring of textile manufacturing jobs.”

The United States said the tariffs were being imposed because China uses joint-venture requirements, foreign-investment restrictions and licensing processes to require or pressure U.S. companies to transfer their technology to Chinese companies. China also deprives U.S. companies the ability to set market-based terms in licensing and other technology-related negotiations.

“Unfortunately, China has been unwilling to change its policies involving the unfair acquisition of U.S. technology and intellectual property,” the U.S. Trade Representative’s office said.

Rick Helfenbein, the president and chief executive of the American Apparel & Footwear Association, said his members who are apparel and footwear importers were saddened by the decision.

“We are extremely disappointed that President Trump has, once again, decided to impose a huge new tax on American consumers and manufacturers,” Helfenbein said. “During the public review process, AAFA and many of its members detailed the extreme damage this new tax will do to our industry, our nearly 4 million U.S. workers and to every American family. It seems most of those pleas were ignored. Instead, today’s announcement shows a deep disregard for American businesses, American workers and American families, who will be negatively impacted by this decision. This is a very dangerous game to play, one that will not end with a winner.”

China is retaliating by imposing its own $60 billion in tariffs on U.S. imports.