WASHINGTON: US President Donald Trump’s next round of tariffs on Chinese imports is scheduled to take effect starting on Sunday (Aug 31), escalating the trade war between the world’s two largest economies with a big hit to consumer goods.
Trump has targeted some US$300 billion in annual goods imports from China for 15 per cent tariffs in two parts, on Sep 1 and Dec 15. If fully imposed, virtually all Chinese imports – worth about US$550 billion – would be subject to punitive US tariffs imposed since July 2018.
Here is a look at US tariffs and expected Chinese retaliation scheduled over the next several months.
SEP 1 TARIFFS
The US Customs and Border Protection agency will begin collecting tariffs for Chinese goods at 12.01am EDT (0401 GMT) on Sunday. Guidance issued on Friday indicated that there will not be a grace period for cargoes that have left China before that time, unlike that granted for goods in transit when the United States imposed a tariff increase in May.
The Sep 1 list covers about US$125 billion worth of mostly consumer products, based on a Reuters analysis of 2018 US Census Bureau data. The target list includes flat panel television sets, flash memory devices, power tools, cotton sweaters, bed linens, multifunction printers and many types of footwear.
The largest category of targeted products covers smart watches, smart speakers, Bluetooth headphones and other internet-connected devices that were spared from a prior round of tariffs, with Chinese imports estimated at US$17.9 billion annually by the Consumer Technology Association.
OCT 1 TARIFF INCREASE
The Trump administration is accepting public comments through Sep 20 on a proposed Oct 1 tariff rate increase to 30 per cent from the 25 per cent duty already in place on US$250 billion worth of Chinese imports.
These products include US$50 billion worth of largely non-consumer goods, including machinery, electronic components including semiconductors and printed circuit boards, and chemicals. But a later US$200 billion list of goods included many consumer goods and building products, including furniture, vacuum cleaners, lighting fixtures, plumbing fixtures, handbags, luggage and vinyl flooring.
DEC 15 TARIFFS
The second part of the 15 per cent tariffs on Chinese goods not previously hit by US duties is scheduled to go into effect on Dec 15. This list represents the heart of the consumer technology sector, including US$43 billion worth of cell phones imported from China in 2018, US$37 billion worth of laptop and tablet computers and US$12 billion worth of toys.
Trump delayed tariffs on these products, saying he wanted to avoid hurting Christmas season sales for Apple Inc and other companies and retailers.
The list covers about US$156 billion worth of total 2018 imports from China, based on US Census Bureau data, and includes a wide range of consumer goods, including plastic tableware, socks, light-emitting diode lamps, Christmas decorations and clothing.
After Trump in early August announced that he was moving ahead with tariffs on virtually all remaining Chinese imports, Beijing announced that it would impose additional 5 per cent or 10 per cent tariffs on a total of 5,078 product categories from the United States, representing worth about US$75 billion annually.
The Chinese move, which also goes into effect in two steps on Sep 1 and Dec 15, targets US crude oil for the first time with a 5 per cent tariff. U.S. soybeans, already subject to a 25 per cent Chinese tariff, will be hit with an extra 5 per cent tariff on Sep 1, while beef and pork from the United States will get an extra 10 per cent tariff.
Beijing also will reinstitute a 25 per cent tariff on US-made vehicles and a 5 per cent tariff on auto parts that it had suspended in December at a time when US-China trade negotiations were gaining momentum.
China already has tariffs in place on about US$110 billion worth of US products, ranging from 5 per cent to 25 per cent, including soybeans, beef, pork seafood, vegetables, liquefied natural gas, whiskey and ethanol. Based on 2018 imports, there are only about US$10 billion worth of US imports untouched, with the largest category consisting of large commercial aircraft built by Boeing Co.
US TARIFF EXCLUSIONS
The Trump administration has excluded some Chinese-made household furniture including cribs and other baby safety products and bibles and other religious texts from the Sep 1 and Dec 15 rounds of tariffs.
Some of the products, including internet modems and routers, were removed because they had already been hit with 25 per cent tariffs previously, while others were taken out for safety or religious reasons. Chinese-made rosaries and religious medals, however, will still be hit with 15 per cent tariffs on Sep 1.