Thursday, May 9, 2019
U.S. raises tariff on Chinese imports to 25% from 10%
The United States will raise tariffs to 25 per cent from 10 per cent on $200 billion worth of Chinese imports effective Friday, according to a notice posted to the Federal Register on Wednesday.
The U.S. Trade Representative's office will establish a process to seek exclusions for certain products from additional tariffs, the notice from the Office of the United States Trade Representative said.
The change comes as Chinese Vice Premier Liu He goes to Washington for trade talks on Thursday and Friday, setting up a last-ditch bid for progress toward a deal that would avoid a sharp increase in tariffs on Chinese goods ordered by U.S. President Donald Trump.
U.S. officials have accused China of reneging in the past week on substantial commitments made during months of negotiations to end their trade war, prompting Trump to set a new deadline to raise tariffs on $200 billion worth of Chinese goods to 25 per cent from 10 per cent.
The higher tariffs will take effect at 12:01 a.m. ET Friday, a spokesman for the U.S. Trade Representative's office said. That comes right in the middle of Liu's visit.
Differences over the enforcement mechanism for a trade deal and a timeline for tariff removal have been sticking points.
U.S. President Donald Trump said on Wednesday he would be happy to keep tariffs on Chinese imports in place, adding that China is mistaken if it hopes to negotiate trade later with a Democratic presidential administration.
"The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to 'negotiate' with Joe Biden or one of the very weak Democrats," Trump tweeted.
"Guess what, that's not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We'll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers," he added.
China's exports fell unexpectedly in April, adding to pressure on Beijing ahead of the negotiations with Washington over Chinese technology ambitions.
Earlier this week Trump sent global financial markets plunging with a surprise threat of more penalties on Chinese imports.
April exports sank 2.7 per cent from a year ago to $193.5 billion US, a reverse from March's 14.2 per cent growth, customs data showed. That was well below private sector forecasts of growth in low single digits.
Imports rose four per cent to $179.6 billion, rebounding from the previous month's 7.6 per cent decline. That added to signs government efforts to reverse an economic downturn might be gaining traction.
Imports of American goods fell 26 per cent from a year earlier to $10.3 billion. Exports to the United States, China's biggest foreign market, were down 13 per cent at $31.4 billion.
Talks are expected to resume Thursday despite earlier fears Beijing might pull out due to Trump's threat. China said Tuesday its economy czar will participate as scheduled.
Weak trade figures might "add more pressure to leaders from both sides to get a deal done," Macquarie Bank said in a report. It said the decision to send Vice Premier Liu He to Washington suggests "China doesn't want the talks to break."
Washington is pressing Beijing to roll back plans for government-led creation of Chinese global competitors in robotics, electric cars and other technologies. The United States also wants other changes including cuts in subsidies to Chinese industry.