WASHINGTON — United States customs agents on Aug. 23 will begin collecting a 25% additional tariff on $16 billion worth of goods imported from China. The United States began collecting the 25% additional tariff on $34 billion worth of Chinese goods on July 6. The second tranche of tariffs expands the list of products subject to the additional tariff and fulfills the Trump administration’s determination to apply the new tariff to a total of $50 billion worth of Chinese goods.
The Trump administration initiated its trade action after an interagency Section 301 investigation found China was guilty of unfair trading practices, including the forced transfer of American technology and intellectual property.Earlier, the Trump administration, as part of a wider trade action affecting several nations, imposed additional tariffs on steel and aluminum imported from China.
The Chinese government in each instance retaliated by raising tariffs to the same degree on American products of equivalent value. China’s tariff hikes in retaliation for the initial tranche of Section 301 tariff increases included a 25% additional tariff on U.S. soybeans, sorghum and pork.
The Trump administration has threatened to impose additional tariffs on another $200 billion of imported Chinese products in September, and President Donald Trump threatened to ultimately extend higher tariffs to all products imported from China. In 2017, the United States imported about $505 billion worth of Chinese goods.
The Chinese government vowed to retaliate tit-for-tat by raising tariffs on U.S. products or taking other actions that would affect U.S. businesses in China.
There were no indications U.S. and Chinese representatives are meeting to defuse the situation.
Meanwhile, Mexico’s economy minister Ildefonso Guajardo arrived in Washington on Aug. 15 for another round of talks with U.S. Trade Representative Robert Lighthizer. Mexican and U.S. negotiators indicated they were close to an agreement on rules of origin, which specify the percentage of an automobile that must be built from parts originating in the NAFTA countries in order to avoid tariffs. An agreement on the contentious issue would be a significant step forward.
The United States and Mexico are working against the clock. Both the current and incoming administrations in Mexico want Enrique Peña Nieto, the current president, to sign the agreement before he leaves office Dec. 1. That would require a revised NAFTA agreement by Aug. 25, because the Trump administration, by law, must submit the agreement for a 90-day comment period before it is signed.