Washington D.C., USA: The United States will levy another batch of tariffs on Chinese imported goods worth $16 billion, the Office of the United States Trade Representative (USTR) announced today. The USTR also released the list of the 279 products worth $16 billion that will face the additional tariff of 25 percent. The tariffs go into effect on August 23, 2018.
The items all have an individual Harmonized Tariff Schedule (HTS) number and cover sectors including industrial technology, information and communication technology, and medical devices.
Today’s USTR announcement brings the total US tariffs to $50 billion worth of Chinese imports.
On March 22, 2018, President Donald Trump directed the Office of the United States Trade Representative to publish a proposed list of products from China that could be subject to additional tariffs.
In April 2018, the USTR published a list of about 1,300 proposed tariffs on Chinese products. After a public comment period that included 3,200 written submissions and 121 witness testimonies, that list was narrowed down to 818 products that will be subject to an additional tariff duty of 25 percent on about $34 billion worth of Chinese imports.
Customs and Border Protection began collecting these duties on July 6, 2018.
The USTR has also proposed 25-percent tariffs on another 284 goods made in China worth $16 billion. These tariffs underwent a public comment process and hearing in July.
On August 7, the USTR announced that it revised the list of proposed additional tariffs to 279 items worth $16 billion that will go into effect by August 23.
In response to these measures, China has issued retaliatory tariffs that match the U.S. duties. China placed a 25-percent tariff on $34 billion worth of U.S. goods on July 6, 2018, and there are pending tariffs on an additional $16 billion worth of U.S. goods.
In response to U.S. tariffs on 818 Chinese products that were put in place on July 6, 2018, China issued retaliatory tariffs on 545 U.S. imports effective the same day.
The U.S. measure violated the World Trade Organization and goes against a consensus reached in China-U.S. consultations, China’s Ministry of Finance said in a statement.
The Chinese duties match the U.S. tariffs by placing a 25 percent tariff on 545 U.S. goods worth $34 billion. Also pending is a 25 percent tariff on $16 billion worth of additional U.S. products. The timeline for the implementation of these pending tariffs will be announced at a later date, according to the Ministry of Finance.
Here is today’s full USTR announcement unedited:
USTR Finalizes Second Tranche of Tariffs on Chinese Products in Response to China’s Unfair Trade Practices
The Office of the United States Trade Representative (USTR) today released a list of approximately $16 billion worth of imports from China that will be subject to a 25 percent additional tariff as part of the U.S. response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property. This second tranche of additional tariffs under Section 301 follows the first tranche of tariffs on approximately $34 billion of imports from China, which went into effect on July 6.
The list contains 279 of the original 284 tariff lines that were on a proposed list announced on June 15. Changes to the proposed list were made after USTR and the interagency Section 301 Committee sought and received written comments and testimony during a two-day public hearing last month. Customs and Border Protection will begin to collect the additional duties on the Chinese imports on August 23.
In March 2018, USTR released the findings of its exhaustive Section 301 investigation that found China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory and burden U.S. commerce.
Specifically, the Section 301 investigation revealed:
- China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.
- China deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations.
- China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer.
- China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.
A formal notice of the $16 billion tariff action will be published shortly in the Federal Register. As in the case of the first tranche of additional tariffs, the notice will announce a process by which interested persons may request the exclusion of particular products covered by a tariff line subject to the additional duties.
After ending the previous session mostly higher, stocks saw further upside during trading on Tuesday. The major averages ended the day firmly in positive territory.
The Dow advanced 126.73 points or 0.5 percent to 25,628.91, the Nasdaq climbed 23.99 points or 0.3 percent to 7,883.66 and the S&P 500 rose 8.05 points or 0.3 percent to 2,858..45.
The continued strength on Wall Street came as upbeat corporate earnings news overshadowed concerns about the ongoing trade dispute between the U.S. and China.
Trading activity remained somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.
The economic calendar remains relatively light throughout the week, although reports on producer and consumer price inflation are likely to attract attention in the coming days.
Biotechnology stocks showed a significant move to the upside on the day, driving the NYSE Arca Biotechnology Index up by 1.7 percent.
Semiconductor and retail stocks also saw some strength, while considerable weakness was visible among gold stocks.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while Hong Kong’s Hang Seng Index jumped by 1.5 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index rose by 0.4 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index advanced by 0.8 percent and 0.7 percent, respectively.
In the bond market, treasuries gave back ground after moving notably higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed by 3.5 basis points to 2.973 percent.