2338

Views

Trump Announces New Tariffs on $300B Worth of Chinese Goods

alt
New container cranes arrive at the port of Long Beach, California (file image)

By The Maritime Executive 2019-08-01 21:51:33

On Thursday, U.S. President Donald Trump announced that he will implement a tariff of 10 percent on virtually all remaining categories of imports from China, effective September 1. The move affects approximately $300 billion worth of Chinese exports, and it includes everyday consumer goods - like phones and shoes - which were excluded from previous rounds. The Trump administration has already imposed tariffs of 25 percent on other categories of Chinese goods worth a combined $250 billion.

In June, after meeting with Chinese President Xi Jinping, Trump said that he would hold off on additional tariffs on Chinese goods while trade negotiations between the two countries resumed. On Thursday, he said that those talks had not produced the desired results. 

"We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing," Trump said. "More recently, China agreed to buy agricultural product[s] from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened." 

After the announcement, energy markets priced in the possibility of lower global economic growth due to a prolonged trade war. The West Texas Intermediate crude oil index shed eight percent, its biggest drop in four years. Brent fell by six percent, its largest drop in three years. The Dow closed down one percent, the Nasdaq down 0.8 percent, and the Shanghai Composite was trading down 1.7 percent as of Thursday night. 

The American Association of Port Authorities, which has voiced concern over previous tariff rounds, expressed caution about the presiden's announcement. "AAPA is very concerned about the President’s renewed threat to increase tariffs on Chinese goods, and the expected actions that the Chinese government will make in retaliation,” said Susan Monteverde, AAPA’s vice president of government relations. 

The National Retail Federation, which represents major importers across the country, also expressed concerns. "We are disappointed the administration is doubling-down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment. These additional tariffs will only threaten U.S. jobs and raise costs for American families on everyday goods," said SVP for government relations David French. “The tariffs imposed over the past year haven’t worked, and there’s no evidence another tax increase on American businesses and consumers will yield new results."