The US is pushing ahead with plans to impose additional 25 per cent tariffs on $16bn of annual imports from China later this month, even as new data show the escalating trade war has so far done little to dent Chinese exports.
US trade officials released a final list of 279 product categories that would be subject to the higher tariffs on August 23. It follows the first round of tariffs on $34bn of imports that went into effect on July 6. The two tranches of tariffs mostly focus on China’s industrial products rather than consumer goods.
The new measures come as US President Donald Trump last week announced he might increase duties to 25 per cent, from 10 per cent, on $200bn of Chinese imports. That has prompted Beijing to threaten tariffs on $60bn of US exports in retaliation, in addition to duties on $34bn of imports such as soyabeans it imposed in July.
Products in the new US tariff list included motorcycles, several varieties of electric motors, industrial chemicals and railway carriages, the US Trade Representative’s office said. The duties were in response to Beijing’s “large-scale technology transfer”, it added.
Beijing in June vowed to match the US’s $16bn tariff round with equal duties of its own. The US had a $376bn goods trade deficit with China last year.
The duties would mostly hit Chinese companies, with “collateral damage” for some US groups that manufacture in China, said Professor John Gong at the University of International Business and Economics in Beijing.
The tit-for-tat battle has done little curb to Americans’ appetite for Chinese goods, however. The dollar value of China’s exports to the US rose 12.2 per cent in July compared to a year earlier, according to figures from China’s customs administration. But China’s trade surplus with the US fell slightly in July to $28.09bn from a record $28.97bn in June, largely as a result of a 27.3 per cent jump in Chinese imports from the US.
The US bought 19.3 per cent of China’s exports in July, down from 19.7 per cent in June. “Shipments to the US did weaken slightly, which suggests the tariffs had some impact. But this was offset by stronger exports to the rest of the world . . . buoyed by the weaker renminbi,” said Julian Evans-Pritchard, an analyst at Capital Economics.
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“These figures show that the trade war has not truly started . . . but they don’t show what will happen after it really begins,” said Professor Zhang Jun at Fudan University in Shanghai. “The trade war is still mainly in the consultation phase and many tariffs have not been enacted.”
Beijing still hopes that talks with Washington can avert duties on an additional $200bn in exports that may go into effect next month. But Mr Trump damped those hopes by threatening to levy duties on all Chinese imports.
The past weekend, Mr Trump claimed the US was winning the trade war, saying that “tariffs are working big time” and that the duties were “really hurting” China’s economy.
But officials on both sides said low-level talks were continuing. “I’m convinced [Trump] wants a deal, he doesn’t want to have these tariffs permanently imposed. He’s looking for an opportunity to claim victory,” added Prof Gong.
