Amongst the 1,300 Chinese products targeted for a 25% import tax by US President Trump this week are numerous leisure marine related products including outboard motors, propellers, a variety of electronic navigational equipment, flow meters, transceivers, stoves, non-powered capstans and winches, pulleys and pulley blocks, hydro-jet engines, fire extinguishers and depth sounders.
The proposed new tariffs will be applied on top of any existing duties on the 1,300 targeted products – announced by the Office of the US Trade Representative (USTR) on 4 April – accounting for $50bn worth of imported goods from China. The list of products is mainly focused on high-tech component and machinery sectors, in which China is pursuing a strong competitive advantage.
The latest volley in the escalating trade tensions between the US and China comes on top of a 25% tariff on imported steel and 10% tariff on aluminium which the Trump administration formally imposed on 8 March. Subsequent exemptions for Canada, Mexico, the EU and South Korea left the US steel and aluminium tariff primarily aimed at Chinese metal imports.
China then followed suit earlier this week announcing it would introduce tariffs of up to 25% on 128 American products, including key agricultural exports such as soybeans, fruit, wine and pork, along with cars, chemicals and plastic resins. The tit-for-tat exchange of threats continued yesterday, with President Trump saying he was looking at additional tariffs for another $100m in Chinese-produced goods.
Many analysts speculate that the heightened rhetoric between Washington and Beijing is merely posturing ahead of tough negotiations between the two countries about trade practices the White House says leads to unfair technology transfers from American companies. Nonetheless, financial markets have reacted with heightened volatiliy to the simmering trade dispute as investors worry about the impact a potential trade war would have on global growth.
The proposed tariffs won’t go into effect until after a comment period, giving rise to a potentially protracted period of lobbying and negotiation which may modify the scope of tariff actions on both sides. According to a statement issued with the proposed product list, the USTR will be accepting written submissions supporting or opposing the proposal by 11 May, with a public hearing due to be held in Washington on 15 May. Requests to appear at the hearing are due by 23 April. The statement did not allude to when the proposed tariffs might be imposed if approved.
Further clarification on the US harmonised tariff schedules which determine precisely which products will be affected can be obtained by contacting Evan Conceicao at Evan.M.Conceicao@cbp.dhs.gov.