• US-China trade tensions have spiked once again after US President Donald Trump said he will proceed with a 25% tariff on US$50bn of goods imported from China.
  • The news comes just ten days after US Treasury Secretary Steve Mnuchin suggested the Trump administration would "put the trade war on hold" – along with the tariffs.
  • In response, China says it has the confidence, capability and experience to defend the interests of Chinese people and the core interests of the country.
"China has consistently taken advantage of the American economy with practices that undermine fair and reciprocal trade," said President Trump

"China has consistently taken advantage of the American economy with practices that undermine fair and reciprocal trade," said President Trump

US President Donald Trump has outlined plans to proceed with the proposed additional 25% tariff on US$50bn worth of imports from China, just ten days after US Treasury Secretary Steve Mnuchin suggested the administration would "put the trade war on hold."

A statement from the White House yesterday (29 May), said China has consistently taken advantage of the American economy with practices that undermine fair and reciprocal trade.

"For many years, China has pursued industrial policies and unfair trade practices – including dumping, discriminatory non-tariff barriers, forced technology transfer, overcapacity, and industrial subsidies – that champion Chinese firms and make it impossible for many US firms to compete on a level playing field," it said.

The statement highlighted the country's industrial policies, such as its 'Made in China 2025' plan, which the White House said harms companies in the US and around the world; its average tariff rate, which is nearly three times higher than the average US rate; and  that China imposes much higher tariffs on US exports than the US imposes on China.

"China has consistently taken advantage of the American economy with practices that undermine fair and reciprocal trade. From now on, we expect trading relationships to be fair and to be reciprocal," said President Trump.

The news follows trade hearings held in Washington earlier this month on the proposed US tariffs, which have divided opinion between the US textile industry on the one side, and US apparel and footwear brands and importers on the other.

The tariffs being mooted are part of a Section 301 investigation by the Office of the United States Trade Representative (USTR) into unfair Chinese technology and intellectual property policies and practices. And while they do not include apparel and footwear, the industry is concerned about their possible inclusion on any lists extended to additional products imported from China.

However, the list of products imported from China on which new tariffs could apply does include machinery used in the domestic manufacturing of apparel, footwear, and textile products.

Just ten days ago, fears of a trade war between the US and China – and the threat of US tariffs – appeared to recede after the two sides agreed to resolve their economic and trade concerns, with Mnuchin confirming to Fox News that the Trump administration would "put the trade war on hold" along with additional 25% tariffs.

But now the truce appears to be over.

"President Trump has taken long overdue action to finally address the source of the problem, China's unfair trade practices that hurt America's workers and our innovative industries," the White House said.

"The United States will impose a 25% tariff on $50bn of goods imported from China containing industrially significant technology, including those related to the 'Made in China 2025' programme."

The final list of covered imports will be announced by 15 June, with the tariffs taking effect shortly thereafter.

In addition, the US will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology. The list of restrictions and controls will be announced by 30 June. It will also continue to pursue a World Trade Organization (WTO) dispute settlement against China originally initiated in March to address its discriminatory technology licensing requirements.

In response, the Chinese Commerce Ministry said the country is prepared for whatever the US may impose.

"Whatever measures the United States takes, China has the confidence, capability and experience to defend the interests of Chinese people and the core interests of the country," the Ministry said in a statement published by state news agency Xinhua.

In a statement on its website, posted under the heading 'China-US Trade Conflict', the Ministry said: "As the two largest economies in the world, cooperation is the only correct choice for China and the US. The two parties should solve each other's concerns through dialogues and realise common development, so as to avoid bigger harms to the overall situation of China-US cooperation caused by the follow-up actions."

Meanwhile, Matthew Shay, CEO of the National Retail Federation (NRF) in the US, said the group is disappointed the administration has announced plans to move ahead with tariffs, which will lead to higher costs for consumers, fewer jobs and retaliation.

"China's trade practices raise serious concerns, but job-killing tariffs aren't the answer," he said. "As the US and China prepare for another round of negotiations, we hope the administration has clearly defined objectives and concrete solutions to resolve this trade dispute without tariffs. The lack of clarity surrounding the administration's plans is creating significant uncertainty for American businesses, disrupting supply chains and threatening to undermine the economic gains we've seen over the past year."

US apparel groups have made their case against tariffs, raising concerns over disruption to supply chains, higher prices for back-to-school and holiday merchandise, and the negative impact on American consumers and businesses.