Economy

First round of U.S. tariffs on Chinese goods to hit $50B - USTR

First round of U.S. tariffs on Chinese goods to hit $50B - USTR

On Tuesday, the Trump administration said it would begin collecting previously announced 25% tariffs on an additional $16bn of Chinese goods from 23 August. In fact, China is America's second-largest crude oil customer after Canada.

It has not yet given a date for its previously announced retaliatory tariffs on $16 billion in United States goods, which will target commodities such as crude oil, natural gas, coal and some refined oil products.

Washington already imposed tariffs on $34 billion in Chinese products on July 6.

China has repeatedly warned it will strike back, and has already begun enforcing or is getting ready to enforce its own retaliatory tariffs, saying the United States is threatening the global free trade order with its protectionism.

The office of US Trade Representative Robert Lighthizer said its "exhaustive" investigation showed that "China's acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory and burden US commerce".

The list of U.S. imports affected by the taxes includes coal, oil, chemicals and some medical equipment.

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So far, China has now either imposed or proposed tariffs on $110 billion of USA goods, representing the vast majority of its annual imports of American products. Big-ticket USA items that are still not on any list are crude oil and large aircraft. Washington applied a 25% tariff on Chinese imports including airplane tires and various industrial parts.

USTR removed a handful of items from its original list after a 46-day public comment and review period found they would cause "severe economic harm".

Gary Hufbauer, a senior fellow and trade expert at the Peterson Institute for International Economics in Washington, said he expected that there would be little to stop further escalation of the U.S.

The dispute over tariffs has continued to escalate as both sides exchange threats.

It is now highly likely that China will retaliate, as promised, with its own $60 billion tariff round. That's soon enough to be used by Trump as a rallying argument, but late enough so that adverse effects will not occur before January 2019. Chinese imports worth $34 billion would be subject to the new 25% tariff as of July 6, with another $16 billion worth of imports subject to the tariff at a later date.China retaliateswith an equivalent set of tariffs. Last year, China imported about $130 billion of USA goods. After Liu visited Washington later that month, the nations released a joint statement pledging to reduce the USA trade deficit with China, among other things.