USTR announces changes to planned September 1 tariff hikes

The White House’s planned 10% tariff increase on $300 billion in Chinese imports that was set to take effect on September 1 is going through some revisions, according to a statement issued from the United States Trade Representative (USTR) earlier today.

This round of tariffs is largely focused on consumer goods, including items such as smartphones, apparel and footwear laptop PCs, toys, and videogame consoles, among others.

“We’re doing this for the Christmas season,” said President Trump in various reports issued today. “Just in case some of the tariffs would have an impact on U.S. customers.”

While the USTR indicated that the September 1 tariff remains on schedule, it also noted that certain products are being removed from the tariff list “based on health, safety, national security, and other factors and will not face additional tariffs of 10 percent.” 

And it added that the USTR will conduct and exclusion process for products subject to the additional tariff, as well as publish on its website, as well as the Federal Register, additional details and lists of the tariff lines affected by this announcement.

In terms of timing, USTR said that it will delay the pending 10% tariff, for certain articles, until December 15. These things include cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.

As previously reported, China is not pleased with this latest development, according to a report issued by its state media outlet, Xinhua, saying it will have to take ‘necessary countermeasures; to defend its core national interests and its people's fundamental interests if the United States goes ahead with these announced tariff hikes.

Hua Chunying, China’s Foreign Ministry spokesperson, said in the report that the escalation of the trade frictions and the threat of ratcheting up tariffs by the U.S. are in line with neither the interests of the two countries' peoples nor the interests of the world, and will have a recessionary impact on the world economy.

And on August 5 China’s Commerce Ministry announced it was halting purchases of U.S. agricultural products, and the Chinese currency, the yuan, weakens past the key seven per dollar level, sending equity markets sharply lower, according to a Reuters report.

When the 10% tariff gains were first announced, they were not greeted with a warm welcome by various industry stakeholders.

The United States Chamber of Commerce strongly opposed President Trump’s announcement.

“Raising tariffs by ten percent on an additional $300 billion worth of imports from China will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong U.S. economy,” said Myron Brilliant, executive vice president and head of International Affairs, U.S. Chamber of Commerce, in a statement. “Like the President, the U.S. Chamber applauds the constructive dialogue between U.S. and Chinese negotiators. We are deeply disappointed that the two sides missed the opportunity in May to address the substantive disagreements between them and have not yet reached a comprehensive, enforceable agreement. We urge the two sides to recommit to achieving progress in the very near term before these new tariffs come into effect, and to remove all remaining tariffs as swiftly as possible.”

Similar sentiment was echoed by US-China Business Council (USCBC) President Craig Allen, who said the USCBC is concerned this recent development will drive the Chinese from the negotiating table, reducing hope raised by a second round of talks that ended this week in Shanghai.

“We’re concerned these additional tariffs will further erode our reputation as a reliable supplier, and our farmers, workers, and consumers will suffer more,” said Allen. “China does not import enough to respond in kind, so any retaliation will be qualitative and disproportionately impact US companies operating in China. We are particularly concerned about increased regulatory scrutiny, delays in licenses and approvals, and discrimination against US companies in government procurement tenders.”

Institute for Supply Management Manufacturing Business Survey Committee Chair Tim Fiore explained that the “trade war” needs to be solved, noting that there is not a consensus on a short-term solution.

“It is being used as a threat more and more often,” he said. “Using the economy as a threat to meet your political goals is a really dangerous place to be.”