China has levied tariffs on a further $60bn worth of US goods following President Trump’s Monday decision to add $200bn of duties on Chinese imports.
The new US tariffs – which will come into effect on September 24 – are the third set of duties put in place this year by Trump, as the US continues its trade dispute with Beijing.
In response to these new levies, the Chinese Ministry of Commerce has announced its plan to include a 10% tariff on 3,571 US items including: wheat; meat; chemicals; and LNG; and a 5% tariff on 1,636 additional products such as smaller aircraft, textiles and computers.
China’s foreign affairs spokesman Geng Shuang stated in a press conference that Beijing needed to impose this plan to “uphold the global free trade order”.
“We hope the US will realize the negative consequences of its actions and take credible means to correct them in a timely manner,” he said.
Mihir Kapadia, CEO and founder of investment management firm, Sun Global Investments, said although Trump’s announcement of the new tariffs was not a surprise, it has impacted the market.
“Though this was a move anticipated by many analysts, the announcement will nevertheless disappoint investors who were hoping for a thaw in trade tensions,” he said. “Oil prices have dipped in response to the news of tariffs. The oil markets have been increasingly weighed down in recent weeks by the prospect of further trade dispute escalation”
Concerns have also arisen in Australia as China and the US are the country’s two largest trading partners. The Reserve Bank of Australia has announced that the trade war is emerging as a “material risk” to the global economy.
Brendan Rynne, KPMG Australia chief economist said rising tariffs by the US and China would raise prices and reduce consumption by the two countries.
“That could ultimately feed through to reduced demand for our exports,” Mr Rynne said.
“Australia needs to be quite cautious about the escalation in trade tensions, because we could start to suffer more broadly as this ratchets upwards.”
Trump tariffs vulnerable to legal challenge, says CTA
The US Consumer Technology Association (CTA) today submitted comments to US Trade Representative (USTR) Robert Lighthizer on the administration’s proposed new $200bn tariffs on Chinese imports. CTA said the tariffs may be vulnerable to a legal challenge because they are not based on the required legal finding of unfair business practices by China.
Instead, the CTA said the new tariffs are retaliatory in nature and require a separate Section 301 investigation, which US Trade Representative (USTR) did not conduct.
“We are skeptical the $200 billion tariffs will be upheld in court if challenged,” said Gary Shapiro, CEO and president CTA. “The extraordinary, six-day hearing before the USTR where several hundred testified against tariffs is a testament that the administration is misguided on this issue. If tariffs are placed, the administration will be on the hook for our GDP shrinking, hundreds of thousands of Americans losing jobs and American families shouldering higher costs due to the rising cost of consumer products. We urge the administration to think twice before slapping on this round of tariffs.”
A study commissioned by CTA has also cautioned that 25 percent tariffs on printed circuit board assemblies and connected devices will cause price increases of up to six percent, impacting even products made entirely with U.S. labor and components. Those price increases are expected to reduce consumer purchasing by 12 percent. More, the impact of a 25 percent tariff on connected devices alone is expected to cost American shoppers an extra $3.2 billion annually.
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