Move comes right after Trump announced $200 billion worth of tariffs on Chinese goods.
On Monday evening, President Donald Trump announced new tariffs on Chinese goods worth $200 billion and threatened to add more if the Chinese do not change their trading practices.
Well, that did not work because China answered with new tariffs on U.S. goods worth $60 billion.
The new tariffs are on top of the $50 billion Trump passed earlier this year. The new tariffs will go into effect on September 24. It will start at 10% and go up to 25% on January 1.
Once these new tariffs go into effect, “Trump will have imposed tariffs on nearly half of the Chinese goods imported to the U.S., which last year were valued at $505 billion.”
Trump warned China not to retaliate because he will then implement even more tariffs. If he does that, “all Chinese imports would be hit.”
At the last minute, the administration removed 300 goods from the list. These include “smart watches, some chemicals, and other products such as bicycle helmets and high chairs.”
$22.6B of the $30B in items removed from the tariff list are consumer electronics (iWatches, etc) https://t.co/BfoggPCNU8
— Scott Lincicome (@scottlincicome) September 18, 2018
Apple CEO Tim Cook explained this morning why Trump removed some of Apple’s products:
President Donald Trump’s latest list of proposed tariffs on $200 billion worth of Chinese goods spared some Apple products at the last minute. Apple had earlier said the proposed tariffs would affect the Apple Watch, AirPods and a host of other products.
“I don’t want to speak for [the Trump administration], but I think they looked at this and said that it’s not really great for the United States to put a tariff on those type of products,” Cook told “Good Morning America.”
Cook has been vocal about the ongoing trade disagreement, even speaking directly with Trump about the tariffs. He has maintained that the company’s flagship handset, the iPhone, isn’t likely to see tariffs.
“The iPhone is assembled in China, but the parts come from everywhere, including the United States. You know the glass comes from Kentucky; there are chips that come from the U.S. and of course the research and development is all done in the United States,” Cook said.
The fact is tariffs will only hurt us consumers because it will raise the prices on the stuff we buy. Economics is not hard and I wish people would stop making it messy. A company can only provide products if it makes a profit (sorry, socialists!). The tariff is a tax. In order to make up for this cost, companies have to raise prices on items. Yes, it’s a must because they need to make a profit in order to stay in business.
Looks like China will back down. From Reuters:
The Chinese commerce ministry’s statement came hours after Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated against the U.S. action.
The brief statement gave no details on China’s plans, but Foreign Ministry spokesman Geng Shuang told a news briefing later that the U.S. steps have brought “new uncertainty” to talks between the two countries.
“China has always emphasized that the only correct way to resolve the China-U.S. trade issue is via talks and consultations held on an equal, sincere and mutually respectful basis. But at this time, everything the United States does not give the impression of sincerity or goodwill,” he added.
These tariffs will go into effect on September 24 as well. From Business Insider:
Trump’s new tariffs threaten to derail plans to send Chinese President Xi Jinping’s top economic adviser to the US for trade talks. The South China Morning Post reports that plans to send Vice Premier Liu He for meetings with senior US officials may now be scrapped. The Wall Street Journal later reported that China could continue with the meetings, but send vice commerce minister Wang Shouwen instead of Liu.
“We have been stressing that talks need to happen on the basis of parity, equality, and good faith,” a representative from the Chinese Foreign Ministry said at a press briefing, according to the Financial Times.
If the higher tariffs happen in January, China will respond accordingly. However, China doesn’t import as many goods from the U.S. so they don’t have as much wiggle room. The new Chinese tariffs affect about “85% to 95% of American exports.”
China doesn’t know when it should start negotiating with Trump. Some people want to wait after the midterm elections because they believe “President Trump isn’t ready to cut a deal, is bashing China now to appeal to his political base and may be more willing to negotiate after the elections.”DONATE
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