On July 10, the Trump Administration announced that the US is beginning the process to impose an additional 10% duty on a further $200 billion worth of Chinese imports.
As you may recall, when the Administration announced its intent to impose duties on $50 billion worth of Chinese imports, the Chinese government announced an intent to retaliate on a comparable value of US imports. At that time, President Trump announced that if China retaliated on US. imports, the United States would impose an additional duty on a further $200 billion worth of Chinese imports.
The US imposed an additional 25% duty on a first round of products worth $34 billion on July 6th and China imposed an additional 25% duty on a first round of products also worth $34 billion that same day. Both countries are also considering imposing additional duty on an additional $16 billion worth of merchandise.
In response to China’s retaliation, the US Trade Representative issued a press release and an advance copy of a Federal Register notice on July 10. The notice states that the US is considering imposing an additional 10% duty on $200 billion worth of Chinese imports. Before doing so, the USTR will accept public comments and testimony at a hearing. The notice includes the schedule, as well as the list of the 6,031 tariff subheadings covered by the $200 billion. In coming up with the list of covered HTS provisions, the notice provides as follows:
“In developing the list of tariff subheadings included in this proposed supplemental action, trade analysts considered products from across all sectors of the Chinese economy. The tariff subheadings considered by the analysts included subheadings that commenters suggested for inclusion in response to the April 6 notice. The selection process took account of likely impacts on U.S. consumers, and involved the removal of subheadings identified by analysts as likely to cause disruptions to the U.S. economy, as well as tariff lines subject to legal or administrative constraints.”
It is clear that the US-China trade war is real and that the Trump Administration is willing to accept meaningful US casualties (i.e., harm to US businesses with interests in China). It is also clear that the range of imports impacted by the duties is growing (by necessity).
All companies that import articles from China should be developing short, medium, and long-term plans for coping with this trade war.