September 17, 2018
USTR Finalizes the $200 Billion Chinese Tariff List. What Made the Cut?
As anticipated, the U.S. announced this afternoon that it would implement a list of approximately $200 billion in Chinese imports. The list contains around 5,745 full or partial tariff lines (out of the original 6,031).
There was some hope last week that discussions around restarting high level trade talks between the U.S. and China could delay the implementation of those tariffs, but the Administration, particularly President Trump, seemed to reject that notion over the weekend. Additionally, before the list was announced, NEC Director Larry Kudlow said that Chinese economic reform efforts were “moving in the wrong direction,” indicating perhaps that the Administration’s leverage was not producing the desired effects, and they felt that doubling down might work.
With the implementation of this list, which will come September 24, the U.S. has now levied tariffs against $250 billion in Chinese products. That is almost half of the $505 billion in Chinese products that were imported into the U.S. in 2017. The only bright spot in the Administration’s announcement was that the tariffs would start out at 10% but would increase to 25% on January 1, 2019. This coincides with the original USTR announcement had reflected the 10% number, but a follow-up notice that pushed back the comment period referenced the 25% rate.
USTR’s final list contains 11 tariff lines that have 10-digit product exemptions, which can be found at the end of their list, and includes items such as child safety seats, highchairs, play yards for children, and infant walkers. Additionally, there were several hundred products pulled from the list entirely. We have put compiled the list of products that have been removed from the final list, which can be found here.
President Trump’s statement also says that if China retaliates, the U.S. would pursue a $267 billion list, meaning that virtually every product imported into the U.S. from China would have tariffs levied against it. China is expected to retaliate with $60 billion in tariffs on 5207 tariff lines, at rates of between 5% and 25% (for those lists, please refer to our August 3 update).