By 24/7 Staff / www.supplychain247.com / May 5th, 2019
President Donald Trump threatened to dramatically escalate the trade war with China and said on Friday that tariffs on $200 billion worth of Chinese goods will increase from 10% to 25% and the US will slap an additional $325 billion worth of Chinese goods with a 25% tariff.
According to the Business Insider, President Donald Trump on Sunday threatened to dramatically ramp up the trade war with China unless a breakthrough on trade talks is reached by the end of the week.
The president said current tariffs on $200 billion worth of Chinese goods will be increased from 10% to 25% and the US will place 25% tariffs on an additional $325 billion worth of Chinese goods that are currently untaxed on Friday.
Trump said the slow pace of trade deal negotiations was the cause for the new restrictions.
"For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods," Trump tweeted.
"These payments are partially responsible for our great economic results. 10% will go up to 25% on Friday. 325 Billions Dollars of additional goods sent to us by China remain untaxed but will be shortly at a rate of 25%."
"The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!"Donald J. Trump✔@realDonaldTrump
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars....91.2KTwitter Ads info and privacy
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Reported by CNN, Trump appeared to be reviving an old playbook by threatening to ratchet up tariffs on Beijing in the hopes of applying additional pressure on China to force negotiators to strike a deal as early as this week.
Earlier this year, Trump said he was prepared to enact new sanctions, and increase existing ones, if a deal wasn't struck by a hard deadline of March 1, but indefinitely shelved those plans.
The President's renewed tariff threat alarmed investors Sunday, sending stock futures down.
The Dow was down more than 400 points Sunday evening, while the Nasdaq was down more than 100 points.
Trade talks between the US and China have been ongoing since Trump and Chinese president Xi Jinping reached a temporary trade truce at the end of November, but major sticking points on how to enforce the deal and what to do with current tariffs have caused problems in the discussions.
Chinese Vice Premier Liu He, the country's top economic official, is scheduled to travel to Washington, DC, for another round of talks this week.
While a deal is close, reports suggest that the US has backed down on a handful of demands designed to force China to make fundamental changes to its economy.
As it stands the US has placed tariffs on $250 billion worth of goods coming from China, while Beijing has responded with tariffs on $110 billion of American goods.
Tariffs Hurt the Heartland, a nationwide campaign against recent tariffs on American businesses, farmers and consumers, today released new data that shows American businesses paid an additional $2.7 billion in tariffs in November 2018 - the most recent month data is available from the U.S. Census Bureau due to the government shutdown.
This figure reflects the additional tariffs levied because of the administration’s actions and represents a $2.7 billion tax increase and a massive year-over-year increase from $375 million in tariffs on the same products in November 2017.
The historic tax increases come despite overall imports being slightly lower. The data, compiled by Trade Partnership, also shows that U.S. export growth hit its lowest level of 2018 in November, thanks in part to a 37 percent decline in exports of products facing retaliatory tariffs.
“This data shows that Americans, not our foreign competitors, are the big losers in the trade war,” Tariffs Hurt the Heartland Spokesman and former Congressman Charles Boustany said.
“U.S. businesses are being hit by a double whammy of historic tax increases in the form of tariffs and declining exports as farmers and manufacturers lose opportunities in the overseas markets they rely on for their livelihoods. As U.S.-China trade talks resume, we hope the administration will heed the concerns of the thousands of American companies facing unprecedented tariff costs while making further progress toward an improved trading relationship and an end to the trade war. The proposed March 1 tariff increase should be completely off the table as American businesses are already facing billions more in tariffs every month.”
The November 2018 data shows that retaliatory tariffs, in particular, have had an immediate and severe effect on US exports. In November 2018, US exports of products subject to retaliatory tariffs declined by $4.1 billion, or 37 percent, from the previous year.
Export Growth on Products Targeted For Retaliation Nosedives
Other key takeaways from the November data:
- Despite $426 million in monthly steel import tariffs and the Trump administration targeting even allies like Canada and Mexico with tariffs, steel imports actually INCREASED in November 2018.
- China Section 301 tariffs cost American companies approximately $2.1 billion in November. Products subject to the Section 301 remedies faced $2.5 billion in tariffs in October, compared to just $363 million in November 2017. Tariffs on most of these products could rise from 10 percent to 25 percent unless the U.S. and China reach a deal in the coming weeks.
Source: Tariffs Hurt the Heartland
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