Trump hits China with another USD 200 billion in tariffs, but Alaska gets a break

Published on
September 18, 2018

U.S. President Donald Trump has approved another round of tariffs on an additional USD 200 billion (EUR 170.7 billion) of Chinese goods, the Office of the U.S. Trade Representative (USTR) announced on Monday, 17 September.

The latest round of tariffs was initially proposed in July, but through a seven-week review period, the number of items to be included in the tariffs was reduced from 6,031 to 5,745. Spared from the final list of goods subject to the tariffs were frozen cod and pollock, a victory for Alaskan seafood companies that send those items to China for processing and reexport.

Beginning 24 September, 10 percent tariffs will be levied on a wide range of goods, including most Chinese seafood entering the United States. On 1 January, 2019 – after the holiday shopping season – the tariffs will increase to 25 percent, according to a USTR announcement.

“We are taking this action today as a result of the Section 301 process that the USTR has been leading for more than 12 months,” Trump said in a statement. “After a thorough study, the USTR concluded that China is engaged in numerous unfair policies and practices relating to United States technology and intellectual property – such as forcing United States companies to transfer technology to Chinese counterparts. These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy.”

In the statement, Trump threatened an additional USD 267 billion (EUR 228 billion) in tariffs – covering practically all Chinese exports to the U.S. – if China takes retaliatory action. The Trump administration has already instituted two rounds of tariffs on China, affecting approximately USD 50 billion (EUR 42.7 billion) in Chinese goods.

China's Ministry of Commerce responded on Tuesday, 18 September, with a statement that the country will retaliate “in a synchronous manner.” Reuters reported that China will impose five to 10 percent tariffs on USD 60 billion (EUR 51.2 billion) worth of American goods beginning 24 September

"The U.S. side insisted on imposing tariffs, which has brought new uncertainty to the bilateral negotiations," the Chinese Ministry of Commerce said in a statement. "We hope that the U.S. side will recognize the negative consequences of such acts and take convincing measures to correct them in a timely manner."

In August, the Trump administration held hearings and received public comments on its proposed tariffs. As a result, it decided to remove nearly 300 tariff lines, including electronic, chemical, and agricultural products, as well as the frozen pollock and cod. 

"We were trying to do things that were least intrusive on the consumer," Commerce Secretary Wilbur Ross said on CNBC. "We really went item-by-item trying to figure out what would accomplish the punitive purpose on China and yet with the least disruption in the U.S."

The At-Sea Processors Association, which represents six U.S. companies that operate factory trawlers involved in pollock and cod fishing and processing, lobbied for the change. However, protests by other industry groups, including the National Fisheries Institute, which lobbies on behalf of the U.S. seafood industry, did not result in other seafood items targeted for tariffs being removed from the list.

Last week, the NFI joined a coordinated effort by around 80 U.S. trade associations called “Tariffs Hurt the Heartland,” intended to oppose Trump’s tariffs.

Photo courtesy of Shandong Kingsun Foods Co.

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