US more than doubles Chinese tariff levels

The US has followed through on its threat to increase tariffs on $200bn worth of Chinese goods.

Tariffs on Chinese products being imported into the US have been increased from 10% to 25% and China has threatened to retaliate.

The types of products covered by the tariff increases includes: fresh food, processed foods, natural resources, chemicals, building materials, industrial products, electronics, consumer goods, toiletries and clothing and textiles.

A more expansive list can be found here.

The increase comes as the two countries are in the process of negotiating a trade deal in Washington. US president Donald Trump said the increase in tariffs is in response to the slow progress of talks.

Trump has also threatened to apply a new 25% tariff on another $325bn worth of Chinese goods.

Analysts have said that a decline in air cargo demand on the China-US trade lane over the last few months is partly caused by the tariffs introduced by both countries last year.

However, when the first round of tariffs were introduced last year, airfreight benefited in the short term from a rush to move goods before the hikes came in.

Rate portal Freightos said the short deadline means there will be no short-term gain for airfreight this time.

Ahead of the tariffs being increased, Freightos chief marketing officer Eytan Buchman said: “If Trump’s tariffs are indeed increased at the end of week, it will impact a wide range of consumer items in a number of ways.

“We’re already hearing of imports with post-Friday arrival dates being rejected. Of course, given the tight deadline, rescheduling imports to beat tariffs by air is barely possible, and probably too expensive to be worth the effort.

“Trump’s tweet also included a threat to ‘soon’ apply a 25% tariff to the $325bn of imports that aren’t yet subjected to a tariff, which may trigger another round of front-loading. However, with trade slowing, it might not increase rates to the same extent as last year.”

The US National Retail Federation (NRF) said the hikes would hit sales.

NRF vice president for supply chain and customs policy Jonathan Gold said: “Tariff increases and new tariffs will mean higher costs for US businesses, higher prices for American consumers and lost jobs for many American workers.

“We encourage the administration to stay focused on a trade agreement, and we hope the negotiations will get back on track.

“It would be unfortunate to undermine the progress that has been made with more tit-for-tat tariffs that only punish Americans.”

The president has been active on Twitter, explaining the move.

Build your products in the United States and there are NO TARIFFS!

— Donald J. Trump (@realDonaldTrump) May 10, 2019

Your all time favorite President got tired of waiting for China to help out and start buying from our FARMERS, the greatest anywhere in the World!

— Donald J. Trump (@realDonaldTrump) May 10, 2019

….If we bought 15 Billion Dollars of Agriculture from our Farmers, far more than China buys now, we would have more than 85 Billion Dollars left over for new Infrastructure, Healthcare, or anything else. China would greatly slow down, and we would automatically speed up!

— Donald J. Trump (@realDonaldTrump) May 10, 2019

Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch! In the meantime, China should not renegotiate deals with the U.S. at the last minute. This is not the Obama Administration, or the Administration of Sleepy Joe, who let China get away with “murder!”

— Donald J. Trump (@realDonaldTrump) May 10, 2019