On Monday, September 17, the Trump administration announced that it would establish tariffs on $200 billion worth of Chinese imports. The US tariffs start at a rate of 10 percent before rising to 25 percent by the end of the year and come into effect on September 24. The tariffs apply to thousands of Chinese products, although, the US removed 300 consumer products including Apple technology items off its original list which is expected to minimize the impact.
In response, China said it is imposing tariffs on US goods worth $60 billion. China’s new tariffs will be levied at rates of 5-10 percent depending on the product also starting on September 24 according to China’s state council.
On Monday, the White House warned that is would respond to any retaliations with yet more tariffs on roughly $267 billion of Chinese exports. Larry Kudlow, the White House economic adviser, said the US was still willing to continue its dialogue with China as long “as they are willing to engage in serious talks.”
According to a Reuter’s report, “Global equity markets gained on Tuesday as the trade dispute was seen as barely denting world growth.” Anthony Salimbene, a global market strategist at American Financial Services commented to Reuters that “the dent to the economic picture is likely to be small.” He calculates the tariffs will “only add 0.2 percentage points to consumer prices which is nothing.” Dutch bank ING estimates that 2.5 percent of world trade was now affected by the tariffs and it will be 4 percent if Trump carries out threats to put levies on all Chinese imports.
Arthur Kroeber, an analyst at research firm Gavekal, commented to CNN that the principal objective of the tariffs was likely to force US multinational companies to reduce investments in China to lessen the interdependence of the two rival economies. “Against this aim, no possible offer by China can cause the tariffs to be lifted,” he stated.