Tuesday , August 21 2018

White House readies to slap 25% duties on $16bn of Chinese goods in two weeks

Bloomberg

The US said it will begin imposing 25 percent duties on an additional $16 billion in Chinese imports in two weeks, escalating a trade war between the world’s two biggest economies.
Customs will begin collecting the duties on 279 product lines, down from 284 items on the initial list, as of August 23, the US Trade Representative’s Office said in an emailed statement. The new list covers products ranging from motorcycles to steam turbines and railway cars.
It will be the second time the US slaps duties on Chinese goods in about the past month, despite complaints by American companies that such moves will raise business costs and eventually consumer prices.
The US levied 25 percent duties on $34 billion in Chinese goods on July 6, prompting swift in-kind retaliation from Beijing.
China has vowed to strike back again, dollar-for-dollar, on the $16 billion tranche.
The total could increase soon. The USTR is reviewing 10 percent tariffs on a further $200 billion in Chinese imports, and is even considering raising the rate to 25 percent.
Those duties could be in place after a comment period ends on September 6.
President Donald Trump has suggested he may tax effectively all imports of Chinese goods, which reached more than $500 billion last year.
A US-China trade war will reduce global output by 0.7 percent by 2020, with China’s economy taking a 1.3 percent hit and US GDP dropping 1 percent, Oxford Economics said in a research note, before the new list was released.
While there’s no major risk of the world lapsing into “damaging stagflation,” the possibility remains of a “bigger blow-up” that sharply reduces trade, as in the 1930s, it said.
Still, there’s little sign the trade threat is hurting shipments just yet.
Chinese data on Wednesday showed imports jumped and exports remained robust in July.
Among the products removed from the earlier list on $16 billion of imports were shipping containers, including those used by freight companies.
Schneider National Carriers and other firms testified during a hearing July 24-25 in Washington that there are no US manufacturers and that the containers are almost exclusively made in China. Also removed were splitting, slicing or paring machines.

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