What a week for U.S.-China trade relations! On July 6, the United States began imposing 25 percent tariffs on approximately $34 billion worth of Chinese products imported into the United States. China then retaliated by imposing tariffs of its own on $34 billion worth of U.S. exports to China, which the United States called “inappropriate” and prompted the United States to announce plans to impose a 25 percent tariff on another $16 billion of Chinese goods. Next, the Office of the U.S. Trade Representative (USTR) indicated that it did not like China’s reaction and was considering imposing a 10 percent tariff on an additional $200 billion of imports from China.

To recap:

  1. U.S. Customs and Border Protection is now imposing a 25 percent tariff on numerous goods from China;
  2. the USTR is reviewing a supplemental list of Harmonized Tariff Schedule categories to possibly implement a 25 percent tariff on $16 billion worth of Chinese goods – a hearing on these categories will be held July 24-25; and
  3. the process for submitting comments and participating in another public hearing in late August regarding the proposed 10 percent tariff on the $200 billion worth of Chinese goods has just been announced.

If that weren’t enough, in testimony before the House Financial Services Committee on Thursday, July 12, Treasury Secretary Stephen Mnuchin was harshly questioned on the administration’s wisdom and strategy concerning these tariffs. Mnuchin denied that the United States is in a trade war with anyone, despite the views of other key trading partners. China’s Ministry of Commerce, for example, in its strongest statement yet, stated that the United States is “not only launching a trade war with China, but also with the whole world, dragging the world economy into danger” and becoming “an enemy to all.”