Global Geopolitical Series: U.S. slaps tariffs on $200 billion Chinese goods with additional $267 billion threat attached

The United States, as anticipated, announced 10 percent tariffs on $200 billion worth of Chinese goods on Monday after the market closing. Several key goods were spared for the moment including Apple iPhones and watches, bike helmets, baby car seats, but it remains doubtful that they will be spared for long as President Trump has attached a threat in the statement that was released by the White House. According to the statement, China had numerous chances over the past 12 months or so, to address the U.S. concerns with regard to its trade and intellectual property practices, but has either refused or failed to act and now if China takes retaliatory actions against U.S. farmers or any other industry, the next step will be pursued immediately, which is to impose tariffs on another $267 billion worth of Chinese goods.

The tariffs will go live from September 24th at 10 percent and will increase to 25 percent next year.

Here is the full statement from the White House, (Highlights are ours)

“Today, following seven weeks of public notice, hearings, and extensive opportunities for comment, I directed the United States Trade Representative (USTR) to proceed with placing additional tariffs on roughly $200 billion of imports from China.  The tariffs will take effect on September 24, 2018, and be set at a level of 10 percent until the end of the year.  On January 1, the tariffs will rise to 25 percent.  Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.

We are taking this action today as a result of the Section 301 process that the USTR has been leading for more than 12 months.  After a thorough study, the USTR concluded that China is engaged in numerous unfair policies and practices relating to United States technology and intellectual property – such as forcing United States companies to transfer technology to Chinese counterparts.  These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy.

For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies.  We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly.  But, so far, China has been unwilling to change its practices.  To counter China’s unfair practices, on June 15, I announced that the United States would impose tariffs of 25 percent on $50 billion worth of Chinese imports.  China, however, still refuses to change its practices – and indeed recently imposed new tariffs in an effort to hurt the United States economy.

As President, it is my duty to protect the interests of working men and women, farmers, ranchers, businesses, and our country itself.  My Administration will not remain idle when those interests are under attack.

China has had many opportunities to fully address our concerns.  Once again, I urge China’s leaders to take swift action to end their country’s unfair trade practices.  Hopefully, this trade situation will be resolved, in the end, by myself and President Xi of China, for whom I have great respect and affection.”