On August 1, President Trump announced via Twitter that starting September 1, the U.S. will impose a 10 percent tariff on $300 billion worth of Chinese goods. According to his tweet, Trump is moving forward with List 4 because of China’s broken promises to buy U.S. agricultural goods and to curb the flow of fentanyl into the U.S. market. Trump told reporters that China will not have the ability to negotiate a delay on the September 1 start date, but the four-week period should be enough time to allow ships to deliver current shipments.
Due to the comparatively low number of U.S. exports to China, Beijing will not be able to respond with an equivalent retaliation. However, the Chinese have announced the official suspension of U.S. agricultural purchases from State Owned Enterprises and have moved to devalue their currency. Future actions could include blocking the sale of rare earth metals, of which China has a near monopoly, to the U.S.
The Office of the United States Trade Representative (USTR) should be publishing a finalized List 4 in the Federal Register in the coming days. The list is expected to contain revisions to the proposed list from last May to reflect public comments and testimonies from USTR’s June hearing.