China will impose additional tariffs on U.S. imports worth about $75 billion in response to a forthcoming fourth tranche of U.S. tariffs across about $262 billion worth of goods from China in annual import value, China’s State Council announced Aug. 23.
Additional tariffs of 5% or 10% will be imposed in two batches on 5,078 U.S. products and will take effect on Sept. 1 and Dec. 15, respectively, according to the State Council.
The $263 billion worth of U.S. tariffs will be imposed at a rate of 10% in phases to take effect Sept. 1 and Dec. 15.
U.S. tariffs will affect goods including apparel, TVs and monitors in the first phase and goods including phones, laptops, toys/games and other apparel items in the second phase.
China will continue to exempt certain items from tariffs, the announcement said.
“The U.S. move has led to a further escalation of bilateral trade frictions, greatly damaging the interests of China, the United States and other countries and also gravely threatening the multilateral trading system and free trade principles,” the statement said, according to Xinhua, the official state-run press agency of China.
After the news broke, Apple (NASDAQ: AAPL) stock on the Dow Jones Industrial Average was down 1.4% in premarket trading on Aug. 23, and chipmakers Micron Technology (NASDAQ: MU) and Nvidia Corp. (NASDAQ: NVDA) had fallen 1.7% and 1.6% in premarket trading, respectively.
Speaking to reporters Aug. 21, President Donald Trump said he is “the chosen one” for confronting China’s trade practices.
“And you know what?” Trump continued. “We’re winning — because we’re the piggy bank. We’re the one that all these countries — including the European Union — wants to rob and takes advantage of.”
Trump also said China wants to make a trade deal with the U.S. and that the ongoing trade war isn’t his and “should have taken place a long time ago by a lot of other presidents.”
Trump took to Twitter on Aug. 23, saying U.S. companies are “hereby ordered to immediately start looking for an alternative to China,” including bringing companies to and manufacturing in the U.S.
He said he will be “responding” to China’s retaliatory tariffs later on Aug. 23.
“This is a GREAT opportunity for the United States,” Trump tweeted. “Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop – it didn’t.”
In response to Trump’s Tweets, UPS said the company follows all applicable laws and regulations of governments in the countries it does business.
“We work closely with Customs and Border Protection and all law enforcement and regulatory authorities to monitor for prohibited substances,” UPS said. “UPS takes a multi-layered approach to security and compliance to identify and prevent delivery of illegal Fentanyl and other illicit substances as well as any other attempts of noncompliant shipments. We work closely with all law enforcement agencies to identify and remove all illegal and counterfeit shipments coming in from abroad.”
Trump’s anti-China tweets moved the Dow Jones Industrial Average down by about 1.5% as of 11:31 a.m. EST on Aug. 23.
U.S. Chamber of Commerce Head of International Affairs Myron Brilliant in a statement Aug. 23 said China’s retaliation is “unfortunate but not unexpected.”
“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,” he said. “It’s time to get back to the table and complete an agreement that deals with the thorny issues of tech transfer, IP enforcement, market access, and the damaging global impact of subsidies.”