Trump Done Did It! New Tariffs on $200bln. Chinese Goods

As the trade fire fight between the biggest two economies of the world rages on, some features of the global trade plain of the aftermath are clearly taking shape: China will not be able to smooch on intellectual properties, and take advantage of foreign investors without retaliation.

The White house has announced the latest round of tariffs on around $200 billion worth of goods from China. And unlike the previous rounds where a limited number of Chinese industrial exporters were hit, this new list of tariffs are targeting a much wider range of Chinese businesses.


On Monday, the official website of the White House released the president’s order to the United States Trade Representative (USTR) to impose additional tariffs on about $200 billion of imports from China. The tariffs of 10% will be in effect starting from September 24, 2018, to the end of the year, then from January 1, 2019 it will rise to 25%. Further stating that if China retaliates, the US will presume to “phase three” tariffs on an additional $267 billion worth of Chinese imports.

Handbags, rice, textiles, fruits, meats, nuts, paper shopping bags, transmission belts, to wooden crates, are just a few of the things from the list. According to the BBC about 300 types of items were taken off the original list of about 6,000. Products that might hurt the American public’s sentiment like bicycle helmets, playpens, high chairs, baby car seats, and of course smart watches.

While the 10% grace period is clearly a bargaining tactic by the Trump, sentiments for investments in the Chinese market have been shaken up. On Monday, the Chinese stock market in Shanghai dropped 1.1% to its lowest since 2014, and Hengsheng Asset Management estimates that the Shanghai Composite Index could shrink 10% further. The market in Shenzhen dropped 1.5% further on Monday, as well.


Trump is setting a precedence. Economically, China is well known for two things, being the biggest manufacturing hub of products for foreign companies, and then coming up with knock offs of those products. Everyone’s heard of iFone.

So far, the WTO has failed to effectively resolve any of the cases against China for violations. Trump has taken the matter into his own hands, and if leaders of other countries follow suit, China will then really be in trouble.



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