The financial fight between the United States and China is nowhere close to a resolution. With both countries playing a game of my horse is bigger than your horse, it is indeed the American people who are suffering financially more than anyone.
It was announced at the beginning of September by President Trump that 10% tariffs would be imposed on the existing 5745 tariff lines from China. Right now, 200 billion dollars in goods from China are soon-to-be hit with these additional tariffs and threats have been made for an additional $267 billion. President Trump noted that in spite of his actions if China were to reciprocate equally by taking retaliatory action against any American Industries he would tack on this additional fee.
Who Gets Hurt
Today the areas of trade negatively impacted are far more vast than most Americans realize. While merely saying that the steel industry will face negative financial ramifications it is easy to overlook the fact that consumer electronics, Smartwatches, Bluetooth devices, textiles, agriculture, child safety furniture like car seats, bicycle helmets, chemical inputs for certain manufactured goods in the agricultural fields, and much more are actually among those Industries harmed.
Unfortunately, this does not mean that companies are losing out on profits directly. What it means is that United States citizens are going to start paying significantly more for their goods. New parents who want playpens or car seats will have to pay more money for them because the companies are pushing that extra cost on to the shoulders of consumers. People who want new smartphones or smart technology are going to start paying significantly more much the same.
This additional 10% tariff is the newest action in response to the investigation under Section 301. The investigation uncovered evidence that Chinese policies and practices were discriminatory concerning technology transfer, Innovation, and intellectual property.
What Started it All
The United States began an investigation into China’s theft of intellectual property and the forced transfer of U.S. technology by China. It has long been noted that China regularly acquires proprietary information from all over the world but mainly from the United States. Part of President Trump’s promises to the American people was that activities such as these would be put to an end.
To determine the extent to which technology was forcibly transferred to China, legal steps were taken, and a government hearing was put into effect. There was a six-week period during which testimony was given and a six-day public hearing was held. The results of which prompted the production of a list for thousands of line items to be subjected to additional tariffs.
The Office of the United States Trade Representative noted that violations were clear and punitive measures were necessary. President Trump followed through and initially decided to instate tariffs on proposed Chinese Imports in July.
Progression of Tariffs
In July of this year, the tariff that started it all was a 25% tariff levied against China and it had an impact on 34 billion dollars worth of goods. The effect was expensive and damaged the cost of many products throughout America containing steel. Industries scrambled for ways in which they could circumvent these extra taxes when importing their goods; companies found new places to operate as a result.
August saw similar punitive action with another 16 billion dollars worth of damages being added to this list. Moreover, the list of products impacted by the extra tariffs expanded. There are 11 key areas subject to these additional financial constraints, but within those key areas, there are over 5,000 line items.
The full list of products affected by the new ten percent tariff is available here.