On August 23, 2019, the ongoing trade dispute between the United States and China escalated quickly when China announced that it would impose tariffs on an additional $75 billion worth of imports from the United States and President Trump tweeted in response that China should not have done so and that the United States would be raising already existing tariffs on Chinese products another 5 percent.
The Customs Tariff Commission of China’s State Council began this latest round of the dispute by announcing that it would impose $75 billion in additional tariffs on certain U.S. products imported into China. According to news reports, the State Council will apply additional tariffs of either 5 or 10 percent on approximately 5,000 U.S. products. Mirroring the implementation of additional U.S. tariffs on Chinese products (see Trump and Trade Update of August 13, 2019), these Chinese tariffs will be applied in two steps – September 1, 2019 and December 15, 2019 – covering such products as soybeans, corn, beef, pork, chicken, cotton and crude oil. Further, China announced that it will reimpose on December 15, 2019, a tariff of 25 percent on imports of U.S. automobiles and automobile parts.
In response, the Office of the U.S. Trade Representative (USTR) released a statement that the United States would increase some of its existing import tariffs on Chinese products by 5 percent beginning on October 1, 2019. For the 25 percent tariff on approximately $250 billion worth of imports from China (China Section 301 Lists/Tranches 1 through 3), the USTR will begin the process of increasing the tariff rate to 30 percent. For the 10 percent tariff on approximately $300 billion worth of imports from China that Trump announced in early August (List/Tranche 4), the tariff will be increased to 15 percent, effective on the already scheduled dates of September 1 and December 15, 2019 for tariffs on these imports. The USTR indicated that a Federal Register notice will be issued shortly on this latest tariff increase that will allow for public comment.