Exporters from China woke up on Tuesday to the news that US President Donald Trump has pressed forward with what was previously considered the “nuclear option” in the long-running trade war.
By publishing a plan to roll out tariffs of up to 25 per cent on almost all of the remaining goods China sells to the United States, Trump has gone further than many thought possible when the trade war’s first skirmishes took place almost one year ago.
Overnight, the Office of the United States Trade Representative (USTR) published List 4 of the Section 301 regime of trade tariffs. This pledged to impose tariffs of up to 25 per cent on Chinese goods with an approximate total annual trade value of US$300 billion.
“The proposed product list covers essentially all products not currently covered by action in this investigation”, the USTR notice read, excluding “pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials, and critical minerals”.
It was published hours after China announced tariffs ranging from 5 to 25 per cent on US$60 billion of US goods to be implemented on June 1, in response to tariff increases by the US last Friday.
Some exporters were taken by surprise. “Frankly, I am super pissed, because this will completely kill my US market,” said Anna Kam, whose company Sky City 2K exports video game console controllers, 85 per cent of which are sourced and manufactured in mainland China. They are then transported to Hong Kong, before being shipped to customers in Europe and the West Coast of the US.
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