Assuring that a second retaliation by China in the escalating trade war is just a matter of days if not hours, moments ago the US Trade Representative released a list of Chinese product subject to 25% tariffs as part of Trump’s Section 301 crackdown on Beijing Intellectual Property abuses, focusing on high tech products.
The list covers about 1,300 tariff lines, or 44 pages, the USTR said, referring to a system of codes used to categorize products. It added that the value of the list is approximately $50 billion in terms of estimated annual trade value for calendar year 2018, a level which is “appropriate both in light of the estimated harm to the U.S. economy, and to obtain elimination of China’s harmful acts, policies, and practices.”
Some example of are shown below:
The list of products included in the USTR list, lines up with technologies China identified in its “Made in China 2025” strategy, White House trade adviser Peter Navarro told Bloomberg Television on March 28.
“China, in my view, brazenly has released this China 2025 plan that basically told the rest of the world, ‘We’re going to dominate every single emerging industry of the future, and therefore your economies aren’t going to have a future,”’ Navarro said. “It’s artificial intelligence, robotics, quantum computing.”
As a reminder, “Made in China 2025” was announced in 2015, and highlighted 10 sectors for support on the way to China becoming an advanced manufacturing power: Information technology, high-end machinery and robotics, aerospace, marine equipment and ships, advanced rail transport, new-energy vehicles, electric power, agricultural machinery, new materials, and bio-medical. China alsohas a separate development strategy for artificial intelligence, published in 2017.
While both investors and businesses have been awaiting details of Trump’s plan to place tariffs on $50 billion in Chinese goods, nobody was looking forward to the list more than China itself. As we reported this morning, China’s US Ambassador said that Beijing is preparing aggressive counter-measures of the “same proportion, scale and intensity” once the Trump administration imposes further tariffs on Chinese goods.
USTR Robert Lighthizer had until April 6 to publish a list of proposed products. There’s now a 60-day period when the public can provide feedback and the government holds hearings on the tariffs.
Back on March 22, Trump said that the tariffs were aimed at penalizing Beijing for what the U.S. alleges to be theft of American companies’ intellectual property.
While China already imposed tariffs in response to Trump’s actions on metal imports (under Section 232), it has repeatedly threatened additional retaliation if Trump unveils the list of Section 301 tariffs, something the Administration did on Tuesday afternoon.
U.S. retailers have voiced concerns tariffs (and an escalating trade war) may eat into consumer products such as shoes and clothing, hitting companies including Walmart Inc. and Target Corp.
On Monday, various PMI indices suggested that fears of tariffs are leading to a drop in confidence about the economy, and early inflationary pressures as producers begin to stockpile core products.
The full list of products that fall under the purview of Section 301 tariffs is below (link).
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