The new round of tariffs will come into place on 24 September and will apply to almost 6,000 items, including textiles, handbags, suitcases, wool, toilet paper and rice.

By Daniel Herborn

Posted on September 18, 2018

Some items that were expected to be included in this round of tariffs, including smartwatches and high chairs, were excluded, however. Apple products such as Apple Watch and AirPods were excluded from the list after the company lobbied for an exemption.

The latest round of tariffs is likely to spark retaliatory tariffs on US goods by China.

Trump introducing new tariffs because China “has been unwilling to change”

The tariffs will initially be levied at 10% and will increase to 25% at the start of 2019 unless the two countries come to an agreement before then.

Once the new tariffs come into force next week, around half all goods being imported from China will be subject to some kind of tariff. The US had previously imposed tariffs on Chinese vehicles, agricultural equipment, medical supplies and aluminium and steel products. China then responded by placing a 25% tariff on more than 500 US products, including electric cars, whiskey, orange juice and cigars.

President Donald Trump said he had introduced the new tariffs in response to “unfair trade practices, including subsidies and rules that require foreign companies in some sectors to bring on local partners.”

“We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly, but, so far, China has been unwilling to change its practice,” Trump said.

“These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy,” Trump said in a White House statement. The US President also Trump urged Chinese leaders to “take swift action to end their country’s unfair trade practices.”

On Twitter, Trump insisted the tariffs had been working and struck a belligerent tone towards nations who will not accept trade agreements with the US. “If countries will not make fair deals with us, they will be “Tariffed!”” he wrote.

Further tariffs may be on the way

Trump reiterated that the US was prepared to “immediately” introduce a third round of tariffs if China retaliates. This would see an additional US$267 billion worth of Chinese products hit with tariffs.

There has also been renewed concern in the US about China stealing intellectual property through the production of counterfeit goods.

Some analysis suggests that the latest round of tariffs will result in higher end user prices for consumer goods such as clothing and food and that low income earners will be disproportionately affected by the price rises.

China has some leverage in that it could decide to place tariffs on manufacturing parts for US companies. An Analyst from Moor Insights & Strategy told The Wall Street Journal that such retaliation from China “could be fairly devastating” for American industries.

Earlier on Monday 17 August, Trump predicted the US and China would eventually come to a deal. “I think it’s going to work out very well with China,” he said. “They want to make a deal. But from our standpoint, it has to be fair. It has to take care of our workers.”