New US, China Tariffs Take Effect on Each Other’s Exports

The U.S. and China imposed new tariffs on each other’s exported goods on Sunday, the latest skirmish in the lengthy and contentious trade war between the world’s two biggest economies.

U.S. President Donald Trump levied 15% taxes on about $112 billion worth of Chinese exported products headed to the United States, with the tariffs likely resulting in higher prices paid by U.S. shoppers on some foods, sports equipment, sportswear, musical instruments and furniture.

Meanwhile, Beijing started adding 5% and 10% tariffs on some of the $75 billion worth of U.S. exports being sent to China that it has said it will tax in the tit-for-tat tariff war with Washington. Initially, China said the American export of frozen sweet corn, pork liver, marble and bicycle tires were among the more the 1,700 products it would tax.

Trump on Friday ruled out any delay in the new tariffs on the imported Chinese goods, saying, “They’re on.”

As they took effect Sunday, Trump declared, “We can’t allow China to rip us off anymore.”

China’s official Xinhua news agency said, “The United States should learn how to behave like a responsible global power and stop acting as a ‘school bully.’ As the world’s only superpower, it needs to shoulder its due responsibility, and join other countries in making this world a better and more prosperous place. Only then can America become great again.”

Negotiators for the two countries are planning on resuming their trade talks in Washington later this month, although there is no indication the two sides are close to an agreement after months of off-and-on discussions and periodic announcements of more tariff increases.

“We’re having conversations with China,” Trump said Friday. “Meetings are scheduled. Calls are being made. I guess the meeting in September continues to be on. It hasn’t been canceled. We’ll see what happens.”

Trump had announced plans to add the 15% tariff on $300 billion worth of Chinese imports, but delayed the levy on many of the products until Dec. 15, so as not to hit U.S. consumers with higher prices during the Christmas shopping season at the end of the year. Trump has wrongly claimed that China is paying for the tariffs he has imposed, but his delay of the new tax was a tacit admission that American businesses who pay the tariffs often pass on their higher costs to consumers.

Hundreds of U.S. companies and trade groups have complained to Trump about the increased tariffs on Chinese imports, but he said that those complaining are partly to blame.

“Badly run and weak companies are smartly blaming these small Tariffs instead of themselves for bad management,” he said on Twitter. “…and who can really blame them for doing that? Excuses!”

On Oct. 1, Trump is also boosting — from 25% to 30% — the tariff on $250 billion worth of additional Chinese imports. In all, if the December tariff hikes are imposed, virtually all of the $550 billion in Chinese goods entering the U.S. would be taxed.

Sunday’s immediate tariff hike affects a wide range of Chinese goods, including such foodstuffs as ketchup, butchered meat, pork sausage, fruits, vegetables, milk and cheese, along with such sports gear as golf clubs, surf boards and bicycles. With the tariff increase, 87% of textiles and clothing the United States buys from China and 52% of shoes are subject to import taxes.

Trump appears determined to change the course of U.S. trade with China, to cut into the chronic wide trade surplus China has enjoyed over the U.S. In 2018, American firms bought $419 billion more in Chinese goods than China did of U.S. products.

The U.S. is also trying to end forced technology transfers from American firms and large subsidies given to Chinese enterprises. Trump says his tariffs are sharply impacting Chinese companies and pushing some foreign companies with Chinese operations to relocate to other nations in southeast Asia whose exports the U.S. does not tax.

But the continuing trade war could affect both the U.S. economy, the world’s largest over second-place China, and, according to the International Monetary Fund, spark a global downturn.

Even before Sunday’s tariff hike, U.S. banking giant JPMorgan Chase said Trump’s levies would cost the typical U.S. household $1,000 a year, which for many Americans would erase the lower federal taxes they are paying under legislation advanced by Trump earlier in his presidency.

The U.S. economy expanded at an annual rate of 2% in the April-to-June period, down from a 3.1% rate in the first three months of the year. Some independent economists, but not Trump’s White House economic advisers, are predicting a U.S. economic recession in the coming year.

Original Article