On September 1, the next round of tariffs on imported Chinese products took effect. This notion by U.S. President Donald Trump pushes more strain on the trade war between the two countries, targeting mostly consumer goods imported from China.
This year, President Trump targets two imports from China, costing about $300 billion, which will take place on September 1. And December 15. If fully implemented, virtually all Chinese imports will be subject to tariffs imposed by the U.S. since July 2018. These imports amount to $550 billion.
Tariffs on September 1
On September 1 12:01 a.m. EDT (0401 GMT), the U.S. Customs and Border Protection agency started collecting tariffs for Chinese imports. This covers $125 billion of imports which consists mostly of consumer products such as flat-screen TV sets, cotton sweaters, flash memory devices, printers, bed linens, and miscellaneous types of footwear.
In the guide that was issued last Friday on August 30, there will be no grace period for the cargoes that have departed from China before the given time. Back in May, the goods in transit were granted a grace period during the imposed tariff increase by the U.S.
Apart from the consumer goods listed above, the largest category of Chinese imports consisted of smartwatches, Bluetooth headphones, smart speakers, and other devices connected to the Internet. These goods were exempted from the previous round of tariffs, having an estimated total amount of $17.9 billion in annual imports.
Tariff increase on October 1
The proposed tariff rate increase on October 1 of this year will be 30% from the existing 25% in place for the Chinese imports valued at $250 billion. These goods are composed of a hefty percentage of non-consumer goods such as electronic components, machinery, and chemicals, which values at $50 billion.
The other $200 billion on the list comprises of consumer goods and building products such as furniture, lighting fixtures, plumbing fixtures, vacuum cleaners, vinyl flooring, luggage, and handbags.
Tariffs on December 15
In the two-part tariff imposition by President Trump, the second round of tariffs is scheduled to take effect on December 15.
The Chinese goods affected by the second round of tariffs are those that are not yet covered by the first one on September 1. This product list is mainly composed of consumer technology products. Examples include $43 billion worth of China-imported mobile phones, $37 billion worth of laptops and tablets, and $12 billion worth of toys.
The reason for the delay of the tariffs on these products is to avoid affecting Christmas season sales, according to President Trump. Notably, for Apple Inc and other companies that usually experience a boom in sales when Christmas rolls around.
Apart from consumer technology, the tariff list also covers $156 billion of total Chinese imports from 2018. This list includes mostly consumer goods like plastic tableware, socks, Christmas decorations, and clothing.
Amidst the trade war between China and the U.S., consumers take the brunt of the battle.
After President Trump’s announcement in early August saying that he will pursue with the tariffs on virtually all of the remaining Chinese goods, Beijing said that it will impose an additional 5-10% tariffs on 5,078 product categories from the U.S., which will total to about $75 billion every year.
The Beijing announcement will also take into effect on Sept 1 and Dec 15, aiming at U.S. crude oil with a 5% tariff. On Sept 1, soybeans from the U.S. will be hit with an extra 5% tariff on top of the already existing 25%, while U.S. beef and pork will be subjected to a 10% increase.
Moreover, Beijing will reimpose a 25% tariff on vehicles made in the U.S. and 5% on auto parts. As of now, China has tariffs on $110 billion on U.S. goods, which are between 5% and 25%. The list includes beef, pork, seafood, soybeans, vegetables, whiskey, and ethanol. There is only an estimated $10 billion left of U.S. products left untouched by the Chinese tariffs.