The Trump administration’s latest salvo in a burgeoning trade war includes tariffs imposed on an additional $200bn worth of Chinese goods ranging from steel panels to fresh garlic.
The US will introduce an initial 10% tariff, giving American businesses some time to find alternative supply chains, before the duties rise to 25% from the start of next year. China responded by saying it will retaliate with its own measures.
Here’s everything you need to know about the latest developments so far.
Trump ramps up tariff pressure with $200bn China hit
The Trump administration’s unveiling of tariffs on the extra $200bn worth of imports from China risks retaliatory measures from the world’s second-biggest economy. China has previously said it would impose duties on $60bn of US goods ranging from liquefied natural gas to aircraft - if the US went through with its threat.
China says it’s forced to retaliate to US tariffs
At a press conference in Beijing, China announced it will respond. There were no specifics, other than that measures will be implemented simultaneously with the US, though China has previously said it would retaliate with levies on $60bn of US goods.
There was also no indication that it’s ruling out talks at this point, only saying the latest salvo creates "new uncertainty".
Theories on why tariffs only worth a market yawn
The initial market reaction was relatively muted. China’s response was restrained, and there were no major surprises in the announcement.
The Shanghai Composite Index closed higher (before the China response was announced). The Stoxx Europe 600 also rose, as did US futures.
Trump saves kids, and target, excluding baby goods
The final list of goods destined for import duties differs from the proposed version, with dozens of products excluded. Kids, parents, and the companies that cater to them, might prove to be the big winners here as everything from playpens to swing sets have been stripped from the revised list.
US will spare some Apple products from new China tariffs
Many Apple products - including the Apple Watch and AirPods headphones - have also been granted a reprieve. As Bloomberg News reported on Monday, the finalised list excludes a line item that covers certain wireless devices.
US consumers dragged into trade war
American shoppers could still be hit by the extra import duties, however. The tariffs affect everyday items including food, furniture, and clothing. That broadens the potential impact to the realm of household spending - or roughly 70% of the US economy.
Samsonite tells retailers prices will rise on Trump’s tariff hit
Samsonite International SA has been sending letters to its wholesale buyers, warning them that it will have to raise prices by 10% if the US follows through with more tariffs on Chinese goods. The company has previously said it manufactures two-thirds of its products in China.
A timeline of how we got here and what’s next
Here’s a timeline of how we built up to this moment, tracing the tit-for-tat trade spat back to the Trump administration’s decision to impose a combination of tariffs and quotas on washing machines. Prices of laundry equipment in the US have since surged.SUBSCRIBE TO FIN24 NEWSLETTER