TARIFF WARS:- TRUMP Vs REST OF THE WORLD
U.S. President Donald Trump said on Thursday he would impose 5% tariffs on all goods imported into the United States from Mexico and raise them every month until they reached 25% unless the Mexican government takes action to stem illegal immigration.The tariffs open up a new front in Trump’s trade wars, which until now have been aimed at procuring better terms of trade for the United States and combat what he calls unfair practices by China, the European Union and others.Trump has rattled the world trade order with unilateral tariffs, the bulk of them aimed at China and covering $250 billion worth of Chinese goods so far. U.S. Trade Representative Robert Lighthizer has launched the process to impose tariffs on all remaining imports from China, another $300 billion worth of goods.
5% on all imported Mexican goods effective from June 10. To rise 5% per month until reaching 25% in October unless the Mexican government takes actions that satisfy U.S. demands to stem the flow of illegal immigrants across the Mexican border into the United States.
Mexico has not yet announced if it would retaliate should Trump go ahead with the tariffs. Typically, tariffs are reciprocated. Mexico’s President Andrew Manuel Lopez Obrador has ordered his foreign minister to the United States for talks.
25% tariffs on $50 billion worth of Chinese technology goods including machinery, semiconductors, autos, aircraft parts and intermediate electronics components imposed on July 6 and Aug. 23 as part of “Section 301” probe into China’s intellectual property practices.
5% tariffs on $200 billion worth of Chinese goods including computer modems and routers, printed circuit boards, chemicals, building materials and furniture.
A 10% tariff on these goods was imposed on Sept. 24, 2018 as a response to Chinese retaliation. Trump increased the tariff rate to 25% on May 10 after accusing China of backtracking on earlier commitments in the talks.
Trump also on May 10 directed USTR to start a public comment process for imposing 25% tariffs on remaining Chinese imports. This $300 billion category of goods would hit consumer products hard, including cell phones, computers, clothing, toys and other consumer products.
CHINESE TARIFFS ON UNITED STATES
China on May 13 announced it would increase tariffs on a revised list of 5,140 U.S. products, worth about $60 billion, after Trump’s latest move. The additional tariff of 25% will be levied on 2,493 products, including liquefied natural gas, soy oil, peanut oil, petrochemicals, frozen minerals and cosmetics. Other products will see tariffs of 5%-20%.
25% tariffs on $50 billion worth of U.S. goods including soybeans, beef, pork, seafood, vegetables, whiskey, ethanol, imposed on July 6 and Aug. 23 in retaliation for initial rounds of U.S. tariffs. China had suspended a 25% duty on U.S. auto imports during their trade negotiations. Beijing has resumed some purchases of U.S. soybeans but has not formally suspended those tariffs.
Based on 2018 U.S. Census Bureau trade data, China would only have about $10 billion in U.S. imports left to levy in retaliation for any future U.S. tariffs. Retaliation could come in other forms, such as increased regulatory hurdles for U.S. companies doing business in China.
EUROPEAN UNION TARIFFS ON UNITED STATES
The European Union on June 22 imposed import duties of 25% on a $2.8 billion range of imports from the United States in retaliation for U.S. tariffs on European steel and aluminum. Targeted U.S. products include Harley-Davidson motorcycles, bourbon, peanuts, blue jeans, steel and aluminum.
India, the world’s biggest buyer of U.S. almonds, has threatened to raise import duties on the nuts by 20% and increase tariffs on a range of other farm products and U.S. iron and steel, in retaliation for U.S. tariffs on Indian steel. These tariffs have been delayed several times, and are currently scheduled to come into effect on June 16.
Trump has said that he intends to end preferential trade treatment for India, which would result in U.S. tariffs on up to $5.6 billion of imports from India. This has not happened, but if it does, India is expected to retaliate with tariffs on U.S. goods.
DUELING TARIFFS WITH TURKEY
The United States halved tariffs in May to 25% on Turkish steel imports and 10% on aluminum. It had doubled U.S. duty rates on steel and aluminum from Turkey 50% and 20%, respectively, in August 2018 citing national security and currency concerns in an escalating trade spat between the NATO allies.
Turkey said it would cut its tariffs on some U.S. goods in response to the U.S. reduction. It has tariffs on $1.8 billion worth of U.S. goods, including motor vehicles, alcoholic beverages, rice, structural steel and beauty products.
Trump ended preferential trade treatment for Turkey effective May 17, a move that imposes tariffs on about $1.66 billion of Turkish imports.
25% tariffs on imported steel and 10% tariffs on imported aluminum, imposed on March 23, 2018 on national security grounds. Exemptions have been granted to Argentina, Australia, Brazil and South Korea in exchange for quotas. Canada and Mexico were exempted from the tariffs earlier this month. In response, both countries lifted their retaliatory tariffs on the United States.
20% to 50% tariffs on imported washing machines, imposed on Jan. 22, 2018 as a “global safeguard” action to protect U.S. producers Whirlpool Corp and GE Appliances, a unit of China’s Haier Electronics Group Co Ltd.
30% tariffs on imported solar panels, imposed on Jan. 22, 2018 as a “global safeguard” action to protect U.S. producers Solar World, based in Germany, and Suniva, owned by China’s Shunfeng International Clean Energy Ltd.
Trump is considering tariffs of around 25% on imported cars and auto parts, based on a U.S. Commerce Department study of whether such imports threaten U.S. national security. He faces a May 18 deadline to act on Commerce’s recommendations.
The new U.S.-Mexico-Canada Agreement protects Canadian and Mexican production in the event of such tariffs through a quota system. Trump has pledged not to impose auto tariffs on Japan and the European Union while trade negotiations with those partners are underway.