Import tariffs on $16b of US and Chinese products come into effect

China has prepared its own list of import tariffs covering $16 billion of US products, mirroring those previously announced by Donald Trump on $16 billion of Chinese products.
Written by Jonathan Chadwick, Contributor

United States President Donald Trump's previously announced import tariffs on $16 billion worth of Chinese products have come into effect, just as China responds with tariffs on an equal amount of US products.

US Customs and Border Protection confirmed on its website that from 12.01am ET on Thursday, it will begin collecting an extra 25 percent in duties on 279 Chinese import products valued at $16 billion, said to be heavy on industrial products including steam turbines and iron girders.

China, meanwhile, has said it has its own list of tariffs covering $16 billion of US imports, which will also come into effect on Thursday.

This latest round brings the total value of import tariffs from both nations since July to $50 billion, with even more in the pipeline.

The tariffs were set to take effect amid two days of talks in Washington between mid-level officials from both sides, marking the first formal negotiations since US Commerce Secretary Wilbur Ross met with Chinese economic adviser Liu He in Beijing in June.

Buisness groups had expressed hope that the two-day meeting would mark the start of negotiations over Chinese trade and economic policy changes, but Trump told Reuters that he did not "anticipate much" from the talks, adding that he had "no time frame" for ending the trade dispute.

"I'm like them; I have a long horizon," he reportedly told Reuters.

Trump previously said he would ready tariffs on an additional $200 billion across 6,031 Chinese product lines. The Trump administration plans to put a 25 percent tariff on these imports, having previously proposed 10 percent. The Office of the US Trade Representative is due to make a final decision on this after the end of this month.

Both sets of taxes are in addition to 25 percent tariffs that took effect on July 6 on $34 billion in Chinese products -- China also responded to these with tariffs of its own.

Trump has warned that he could tax up to $550 billion in Chinese products, exceeding the US' total imports from China during 2017.

Trump started his trade war with China in March by imposing higher tariffs, after saying an investigation had found that China is using foreign ownership restrictions to require tech transfers from US to Chinese companies, as well as conducting espionage to acquire intellectual property.

Trump's administration has also been cracking down on all Chinese involvement in the American tech sphere, including with draft legislation barring the sale of national security-sensitive technology to China and blocking government or contractors from buying telecommunications equipment and services from Chinese heavyweights Huawei and ZTE.

Both companies faced a heavy drop in sales in the US, after the country's intelligence chiefs recommended its citizens not to use their products, citing concerns over "allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks".

In July, the US Commerce Department lifted its export ban on ZTE, after the Chinese telecom giant deposited the final tranche of a $1.4 billion penalty the US imposed against it.

The ban was originally imposed after the US government determined that ZTE violated terms of a 2017 settlement, reached after ZTE illegally shipped US equipment to Iran and North Korea.

A trade war between the two powerhouses could shave off 0.25 percent of the GDP of both of their economies this year, according to research by Singapore's DBS Bank, with more damage expected in 2019.

Economists also believe that every $100 billion of imports affected by tariffs would reduce global trade by around 0.5 percent.

With AAP


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