Trump Hikes List 4 Tariffs to 15%, All Previous Lists to 30%, After Chinese Retaliate on US Goods
Tech and business interests waited in nervous silence all day Friday for President Donald Trump’s possible policy reactions to China’s imposition of retaliatory tariffs on $75 billion in U.S. goods. An obvious fear was that Trump would ratchet up the 10 percent List 4A Section 301 tariffs when they take effect Sept. 1 or rethink the decision deferring tariffs on List 4B goods to Dec. 15.
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Many such fears proved founded at 5 p.m. EDT when Trump tweeted he will hike the Sept. 1 List 4A tariffs to 15 percent. He also will raise the three previous lists of duties in effect at 25 percent since July 2018 to 30 percent, effective Oct. 1, he said. Trump mentioned nothing about the 10 percent List 4B duties deferred to Dec. 15, but an Office of the U.S. Trade Representative statement said the Dec. 15 goods would be tariffed at 15 percent as well.
List 4A includes a broad swath of consumer tech goods, including TVs, smart speakers, smartwatches, speakers and Bluetooth headphones. Trump has said duties on List 4B goods were deferred so as not to hinder holiday shopping.
USTR will initiate a new "notice and comment period" for the hike to 30 percent in the first three rounds of tariffs, said the agency late Friday. "For the 10% tariffs on approximately $300 billion worth of Chinese imports that the President announced earlier this month, the tariffs will now be 15%, effective on the already scheduled dates for tariff increases on these imports," said USTR. That confirmed the List 4B duties will take effect at 15 percent Dec. 15 rather than the original 10 percent.
"It's impossible for businesses to plan for the future in this type of environment,” said the National Retail Federation just after 6 p.m. EDT. “The administration's approach clearly isn't working, and the answer isn't more taxes on American businesses and consumers. Where does this end?"
U.S. consumers are "collateral damage" in the trade war with China, said the Information Technology Industry Council. "“Both nations need to seriously consider the ramifications of their actions on global economies and markets and stop creating an environment of extreme uncertainty.”
"Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA," tweeted Trump Friday morning. "We don’t need China." The U.S. "would be far better off without them," he said. "The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP."
The Chinese retaliation was "unfortunate but not unexpected," said the U.S. Chamber of Commerce, about the only group to speak out earlier in the day Friday. "Nobody wins a trade war, and the continued tit-for-tat escalation between the U.S. and China is putting significant strain on the U.S. economy, raising costs, undermining investment, and roiling markets."
Imposition of 5 and 10 percent tariffs on U.S. goods in “two batches” on Sept.1 and Dec. 15 was in direct reply to the administration’s latest Section 301 tariff actions taking effect the same dates, said the China State Council. The Section 301 “measures” caused the “continuous escalation” China-U.S. “economic and trade frictions, which have greatly harmed the interests of China, the United States and other countries, and have also seriously threatened the multilateral trading system and the principle of free trade,” it said.
China was "forced to take countermeasures,” said the council. It also said China would reinstate 25 percent tariffs on U.S. cars and 5 percent duties on U.S. auto parts, effective Dec. 15. China suspended tariffs on U.S. automotive imports when China-U.S. trade talks progressed rapidly toward a comprehensive agreement before they broke off in May.