According to the list released by US Trade Representative, Robert Lighthizer, the new 10% tariffs will apply to a long list of items including seafood and other fresh foods saying …
"As a result of China's retaliation [the introduction of tariffs on $34 billion worth of US imports] and failure to change its practices, the President has ordered the US Trade Representative (USTR) to begin the process of imposing tariffs of 10% on an additional $200 billion of Chinese imports."
These tariffs are in addition to 25% tariffs on $50 billion worth of Chinese goods that started this past Friday and will go into full force over the next two weeks, according to administration officials.
While the tariffs on the $200 billion won’t go into effect immediately, Lighthizer said in his statement…
"This is an appropriate response under the authority of Section 301 to obtain the elimination of China's harmful industrial policies,"
"USTR will proceed with a transparent and comprehensive public notice and comment process prior to the imposition of final tariffs, as we have for previous tariffs."
So, the review process in place could mean these new increased tariffs won’t occur until late summer, early fall. There will be a comment period, during which businesses and consumers can raise issues with the inclusion of certain goods on the list.
The problem is China will not wait to announce its retaliation.
Make no mistake, Xi will not lose face. He will not back down. President Trump seems unaware of the cultural backdrop in status to believe this escalation with Xi will lead to anything other than an extended confrontation on all fronts.
Trump is being reckless with the economic health of our country. He’s cut taxes and increased our yearly deficit to $1.3 trillion, and has a multi-front trade war underway.
This $200 billion tariff escalation was immediately attacked by industry groups and trade experts who warned that the rapidly expanding trade war with China would increase costs for consumers and discourage investment by businesses as well as new hiring or buying equipment.
The senior vice president for government relations at the National Retail Federation, David French, believes the tariffs are going to mean the majority of the pain from the new tariffs would be felt by US consumers and families…
"The latest list of $200 billion of products to be subject to tariffs against China doubles down on a reckless strategy that will boomerang back to harm US families and workers,"
"The threat to the U.S. economy is less about a question of 'if' and more about 'when' and 'how bad.'"
Jay Timmons, the president and CEO of the National Association of Manufacturers (NAM) had this to say about the back and forth in retaliatory tariffs:
"The last thing America's manufacturing workers need is an escalating trade war."
“America has China's attention, so instead of more tariffs, the US and China should immediately begin working toward a fair, bilateral, enforceable, rules-based trade agreement to end China's market-distorting activities."
Even some brave free-trade Republicans are irate enough to speak out against Trump's decision to impose increased tariffs on little over 80% ($500 billion) of China’s imports into the United States...
GOP Sen. Orrin Hatch, chair of the Senate Finance Committee said in a statement …
"Although I have supported the administration's targeted efforts to combat China's technology transfer regime, tonight's announcement appears reckless and is not a targeted approach,"
"We cannot turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy."
The Chinese Ministry of Commerce last Friday has already accused Trump as having started the "largest trade war in economic history."
WallStreetRebel.com has been warning – despite the strong economy – a trade war can change market psychology from positive to negative very quickly. Investors and traders should keep in mind Trump has too many theaters of war.
The Russian probe could percolate to a boil any day with his ex-personal lawyer Michael Cohen facing indictment, or if Paul Manafort loses his cool now that he’s being transferred into a hole that has been described as a bug infested dungeon.
So here we are fellow Americans…
At the direction of the self-described “master negotiator”, President Trump and his administration of “yes men” announced an extensive list of Chinese exports that will be subject to dramatically increased tariffs.
China’s Xi has warned that it’s only polite to respond to a tariff with a tariff. The truth is the Chinese – with the second largest economy in the world – has all sorts of weapons to humiliate Trump while maintaining big friendly smiles.
I believe these back and forth raising tariffs confirm Trump’s recent concern that the Chinese’ lack of cooperation with his denuclearization of North Korea efforts will prove to be warranted. The Chinese have every reason to sabotage Trump. They can do it by a series of actions including but not limited to:
· Chinese increasing the number of contacts between our Navy and Air Force assets
· Ramp up island creation in disputed waters off China’s coasts…
· Sign trade deals with Europe, South American countries, and Canada…
· Brazil and Mexico win big with oil headed back to $80 - $100 a barrel.