Trade Tensions
No matter which outlets you subscribe to, your newsfeed is undoubtedly filled with talk of the increasing economic tensions between the United States and China. Given that this is a resource for entrepreneurs and I’m not here to debate who the long-term economic winners and losers or predict the impact on international trade as a whole. The purpose of the post is simply to review what has been said, what has been put in motion and help you identify if there will be any immediate impacts on your business.
President Trump first announced on March 22, 2018, that the United States would be imposing a 25% tariff hike that would impact $50 billion in Chinese goods imported into the U.S annually. On April 3rd the U.S Trade Representative (USTR) announced the first list of products that would be impacted. That list contains 818 product lines comprised mostly of non-consumer products and includes industries such as aerospace, technology, robotics, industrial machinery, medical equipment, and automobiles. The complete first list represents $34 billion in products and will be effective as of July 6, 2018. You can see the full list of product lines here.
The second list covers 284 lines worth $16Billion in annual imports is currently under further review and does not yet have an effective date. The second list can be found here.
More threats
In response to the U.S government’s tariff implementation, the Chinese government has announced a list of US origin products that will be subject to an addition 25% tariff which will also come into play on July 6 2018. The list covers $34 billion in Chinese imports from the US and can be viewed (in Mandarin) here.
In response (yes, again) to the Chinese government’s tariff implementation, on June 18th President Trump threatened a 10% tariff on an additional $200 billion in Chinese products. He also stated that another $200 billion would be imposed if China retaliates further. These threats pretty much cover all over the United States annual $505.47 billion in Chinese imports. As of this writing, no product lines or official documentation have been released pertaining to these threats.
The trade landscape between China and the United States is changing very quickly so be sure to stay in the loop and monitor how these changes will affect your business.