President Trump is threatening tariffs on an additional $200 billion in Chinese goods

President Trump is threatening tariffs on an additional $200 billion in Chinese goods

The US has escalated its trade threats to China after President Trump said he is considering tariffs on an additional $200bn of Chinese goods if China "refuses to change its practices."

The Office of the United States Trade Representative (USTR) yesterday (18 June) said it has been tasked with identifying the Chinese products on which the additional 10% tariffs would apply, in a move that doubles an earlier list of Chinese imports – collectively valued at $100bn – already under consideration for additional tariffs.

It also comes on top of $50bn worth of Chinese goods subject to an extra 25% tariff as outlined by the US on Friday (15 June) in response to a Section 301 investigation into unfair Chinese technology and intellectual property policies and practices. This additional US duty will initially apply to 818 product lines from 6 July.

No textile and apparel products imported from China are so far being hit by the US's punitive tariffs and, according to Friday's announcement, most of the textile machinery on the initial product list outlined in April has also been excluded.

China's Ministry of Commerce has so far responded by outlining retaliatory tariffs of 25% on $50bn worth of imports, including combed cotton – but also says the country will "fight back firmly" against additional tariff measures by the US government.

"The initial tariffs that the President asked us to put in place were proportionate and responsive to forced technology transfer and intellectual property theft by the Chinese," says US Trade Representative Robert Lighthizer.  

"It is very unfortunate that instead of eliminating these unfair trading practices China said that it intends to impose unjustified tariffs targeting US workers, farmers, ranchers, and businesses. At the President's direction, USTR is preparing the proposed tariffs to offset China's action."

However, the group representing US retailers has called the latest tariff threat "reckless escalation" and is asking Congress to intervene. The President currently has the authority to add tariffs without approval or legislation from Congress.

"This is just what we predicted – a tit-for-tat trade war has erupted and American families are caught in the middle" and threatened by higher prices for everyday essentials, says Matthew Shay, president and CEO of the National Retail Federation (NRF).

"This reckless escalation is the latest reminder that Congress must step in and exert its authority on trade policy."

US apparel groups last month 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.

But the big concern is that finished textile and apparel products are likely to appear on any future lists of imports from China that would be subject to Section 301 tariffs.

The National Council of Textile Organizations (NCTO) is pushing hard for this. "NCTO is convinced that the Trump administration's efforts to deter China's unfair trade practices would be even more effective if textile and apparel end products from China were made subject to Section 301 tariffs," president and CEO Auggie Tantillo said last week.

To see the latest trade policy developments since President Donald Trump took office in January 2017, click on the following link: Timeline – Trump's track record on trade – Update