SUMMARY
United States President Donald Trump’s first round of tariff on $34 billion worth of Chinese imports will take effect on Friday, July 6, 2018. The first 25% tariff will impact a variety of products including farm machinery, industrial products, medical devices, automobiles, and aircraft parts. Chinese Commerce Ministry spokesman Gao Feng said that 59% of the $34 billion worth of Chinese exports to the US would be subject to the Friday tariffs. Chinese government leaders said China will fight back with tariffs on an equal amount of goods including pork, poultry, soybeans and corn as soon as the US duties on Chinese goods are active. American farmers will likely be the biggest victims of this trade war and risk losing access to a huge market in China. Ford has not yet announced any plans to raise its prices for Ford or Lincoln automobiles imported to China. Moreover, a Chinese court this week temporarily banded Micron Technology Inc from selling its main semiconductor products in China. There is no specific date announced when the court will lift the ban.
FAO GLOBAL ASSESSMENT
There are no signs that US administration will lift the tariffs on Chinese goods. One observation was that despite the disputes, the US stocks gained while Chinese stocks lost. Some American companies are pulling back investment in equipment and new jobs due to the uncertainties surrounding the trade policy with China. The list avoids direct tariffs on final goods, such as cellphones and shoes. If an American clothing company wanted to avoid the major effects of the proposed tariffs on their exports to China, one option, should they have the resources, is to move production to China. Moreover, business base on importing Chinese high-end cellphones (such as Xiaomi and Huawei) still can make profits.
Related Links
- The Washington Post: Trump’s trade war with China is finally here — and it won’t be pretty, analysts say
- The Washington Post: A trade war with China could hit these communities hardest
- Reuters: China says U.S. ‘opening fire’ on world with tariffs, vows to respond
- The Street: China Tariffs, Oil Prices, ZTE, Praxair and Starbucks – 5 Things You Must Know
- Bloomberg: China’s Trade Weapons of Mass Destruction Are Missing
- Reuters: Ford says not planning China price hikes despite new tariffs
- Reuters: Trade war could hurt these economies far more than U.S., China
About the Author
Ziqing Zhang- International Policy Associate
Ziqing “Sunny” Zhang is an international policy intern and a Masters student in the Elliott School of International Affairs at George Washington where she is majoring in Asian Studies with a concentration in international development and focusing on East Asia and development in Southeast Asia. A native Chinese speaker, Ziqing is fluent in both Mandarin and Cantonese as well as English. She has previously interned at the U.S.-China Education Trust, the Japan-American Society of Washington, DC, and is an alum of American University in Washington, DC.
