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The US is preparing to increase duties on all imports from China


Moscow. May 10. INTERFAX.RU - An increase in duties on US imports of Chinese goods worth $ 200 billion per year, which was expected as early as January 1, but was repeatedly postponed, entered into force on May 10.

According to The Wall Street Journal, the deferral granted by US President Donald Trump has expired, as he threatened all this week. Now, Chinese goods will be taxed at a rate of 25%, not 10%.

However, the documents sent by the presidential administration to the federal register indicate that duties will not apply to those goods that were shipped from China before May 10, the newspaper notes.

The Ministry of Commerce of China on Friday issued an official statement that retaliatory measures would be taken, but did not specify what they would consist of.

Trump threatened to raise duties from Sunday, although last week the markets were waiting for an early conclusion of a bilateral agreement. On Wednesday, he said that China had effectively disrupted a trade deal between countries. However, on Thursday, Trump announced that he had received a “wonderful letter” from Chinese President Xi Jinping and that “there were practically no obstacles to the deal from China.” However, the extension of the fee increase was not extended.

US-China trade talks should continue in Washington on Friday.

Subject to the changes that have entered into force, the United States imposed increased duties on Chinese goods worth $ 250 billion per year, which is equivalent to 47% of all goods imported from China. In China, there are still retaliatory duties on US products worth $ 110 billion a year - this is 91% of US imports.

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Washington and Beijing will continue dialogue

At the same time, Trump called the two-day talks with the Chinese side constructive and highlighted strong relations with Chinese President Xi Jinping. The dialogue between Beijing and Washington will continue, the head of state added. According to him, the established fees may be canceled depending on the outcome of further consultations.

Fees on a number of Chinese goods were raised on the night of May 10, as Trump announced earlier. Customs duties on goods totaling $ 200 billion rose from 10 to 25 percent. At the same time, 25% duties were set on some goods even earlier. Thus, new fees affect about half of United States imports from the PRC.

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America first of all? Now in practice

Even before taking office, U.S. President Donald Trump has repeatedly stated that he is ready to go to conflict to protect America's interests in its relations with major trading partners. It took Trump a little over a year for actions to follow.

Trump's struggle for a new order in world trade: a chronicle of escalation

America first of all? Now in practice

Even before taking office, U.S. President Donald Trump has repeatedly stated that he is ready to go to conflict to protect America's interests in its relations with major trading partners. It took Trump a little over a year for actions to follow.

Trump's struggle for a new order in world trade: a chronicle of escalation

Penalties on steel and aluminum imports

On March 8, 2018, Donald Trump takes the first step in a trade conflict that still existed only in words. Live, organized from the Oval Office around the world, surrounded by American steelworkers, the US president signs a decree imposing penalties on imports of steel and aluminum. The main victim is China. The entry into force of duties on EU countries has been delayed.

Trade Conflict Comes to Germany

From June 1, 2018, the American penalties extended to the import of steel from the EU, for example, to these steel sheets produced by the German company Salzgitter AG. Despite this, losses for German exports are so far limited. However, the situation may change if Trump carries out his next threat and imposes 20 percent duties on cars imported from the EU.

Twitter threats are Trump's main weapon

Twitter is the main tool of the American president. Donald Trump uses the service to present his view of things, to voice new threats or put forward another ultimatum. In the “crusade” of the American leader for establishing a new order of relations with the most important trading partners of the United States - China, the EU and NAFTA members Mexico and Canada - not a day goes by without Twitter attacks.

Threat to German automakers

New Mercedes cars are waiting in Bremerhaven, Germany, to be sent abroad. When the US president threatens to impose 20 percent duties on cars from the EU, his goal is primarily Daimler and other German automakers. Their success in the US market, according to Trump, is the reason for the huge US trade deficit.

New deal with Canada and Mexico

One of Trump's main goals was to replay the terms of the free trade agreement between Canada, the United States and Mexico (NAFTA), which, in his opinion, is detrimental to the US economy. Trump is trying to protect the interests of American business, suffering from the transfer of production - primarily by auto manufacturers - to Mexico, where cheaper labor.

Mexico at the forefront of US trade policy

In Mexico, cars for the American market are produced not only by automakers from the USA - German Volkswagen and other automobile concerns have been working on this scheme for decades. Under Trump pressure, a number of auto giants such as Ford have recently frozen plans to build new plants in Mexico. In the photo - the millionth Volkswagen Beetle car, released in Mexico in 1992.

Canada also feels pressure from the United States

Along with Mexico, Canada also felt the tough behavior of the American president in trade policy. In addition to Canadian steel and aluminum, wood also fell under US sanctions. However, in the end, the fine on Canadian softwood introduced in April 2017 led to a sharp increase in the price of this product for home builders, especially in America.

Beijing counter strike

The Chinese government has chosen American food producers as the main target of its retaliatory penalties against the United States. As a result, products such as nuts, vegetables, and meat imported from the United States became significantly more expensive in China - as in this supermarket in Hong Kong specializing in selling products made in USA.

American SUVs in Beijing's field of vision

If everything goes as the Chinese authorities plan, then cars of American automakers, such as Jeeps of the Fiat Chrysler concern, will rise in price in the future by a quarter. From now on, additional import duties of 25 percent will be imposed on them. A new list of goods that will fall under China's reciprocal customs duties is already in preparation, Beijing said.

Trump: trade negotiations between the US and China are at the initiative of Beijing, an alternative to them - duties

Senator Chuck Schumer of New York, a Democratic congressional leader, supports Trump’s tough stance on China, but he may refuse Republican President support if he fails to enter into an agreement to fundamentally change China’s economic policy.

The US threats sounded against the backdrop of the resumption of talks between Washington and Beijing at an average level on Wednesday and their continuation with the participation of Liu He on Thursday. Everything went smoothly in recent months, but negotiations were in jeopardy last week.

According to representatives of the Trump administration, the United States believed that China agreed to discuss in detail the revision of legislation necessary to implement a trade agreement. Beijing said last week that it had no such intention, and on Sunday, Trump threatened to increase duties, putting this issue on public display. The US found that Beijing had abandoned its earlier promise, while China said the move was an attempt to revise US claims that violate China’s sovereignty.

The hitch in the negotiations reinforced Washington’s doubts about Liu’s lack of political power to keep promises.

For a long time, Liu has been a trusted adviser to Chinese President Xi Jinping, but is mainly known for his scientific and not political activities. On Thursday, representatives of the Trump administration said that threats of an increase in duties were not addressed to Liu, who is considered a reformer of the economy, but were sent to conservatives in China, taking a tough stance against the United States.

Trump tempered the threats, noting that Chinese President Xi Jinping wrote him an “extremely beautiful letter” on Wednesday. Trump is likely to personally speak with the Chinese leader in the hope that they will be able to resolve the contradictions.

“Let's work together. Let's see if we can achieve something,” Trump said.

China forced to retaliate on US duty increase

It is difficult to say whether Liu was instructed by the president regarding the possibility of making the concessions that the US considers necessary to conclude a deal, or whether he simply needs to talk with representatives of Washington in order to better understand their intentions. Unlike previous visits, this time Liu was not designated as a plenipotentiary, so he probably does not have the opportunity to make a significant compromise.

So far, China’s countermeasures against the United States have mainly focused on the agricultural sector and have reduced imports of soy, sorghum and pork.

The financial markets on Thursday swept the volatility, as investors could not understand the situation around trade negotiations. The Dow Jones Industrial Average fell by more than 400 points, helped by declining stocks of manufacturers and technology companies that were heavily dependent on China's economic growth. Investors preferred relatively safe assets, and Treasury bond yields declined.

After Trump nevertheless suggested that the White House could reach an agreement with Beijing, stocks and bond yields rebounded from intraday lows, but the nature of the discussion between Washington and Beijing indicated to traders the continuing uncertainty about the outcome of trade negotiations.

It is likely that the impact of the increase in duties on the Chinese economy will not be immediately apparent. A duty of 10% on certain categories of goods from China has been maintained since September. Companies purchasing these goods noted that their forecasts foresee a further increase in duties.

Basically, duties were increased on capital and intermediate goods. The increase in duties will also affect consumer goods by $ 40 billion. Duties are imposed on more than 5000 items of goods.

New U.S. imports of Chinese goods will take effect after midnight on Friday. Those goods that are delivered to the country by air will immediately be subject to increased duties, but the old tariffs will apply to goods that are delivered by sea and were sent before Friday.

If the US goes further and impose duties on all imports from China, then it will seriously hit consumers. Among these products are various smartphones, clothes, laptops and other everyday goods. In the USA, they try to avoid introducing duties on these goods in order to prevent an adverse reaction from consumers, which could undermine US efforts.

Any additional fees may be introduced after a few weeks or even months. The administration of the US trade representative said that first you need to make a list of these products and hold hearings. Authorities carefully carry out all necessary procedures to avoid lawsuits.

The trade conflict between the US and China began more than a year ago, when the US trade mission published data that US companies were systematically forced to transfer technology to Chinese competitors. In addition, it became known that the Chinese authorities provide support to Chinese companies in the form of subsidies and other measures, which leads to unfair competition. In addition, US companies faced unfair obstacles in China's financial and digital markets.

These issues have now faded into the background, and the focus of the discussion is the question of whether China is ready to conclude an agreement providing for a change in legislation, and whether the US is ready to refuse to increase duties.

China "has begun a review of the agreement. We cannot allow this," Trump said on Thursday.