The truce declared by Treasury Secretary Steven Mnuchin little more than a week ago is apparently over.
On Tuesday, President Trump announced plans to move forward with the planned 25 percent tariffs on $50 billion in goods imported from China. The list of affected products will be announced by June 15.
The announcement comes as a bit of surprise given that the two nations had released a joint statement earlier this month that struck a consolatory tone, saying recent meetings held in Beijing were “constructive.” At the time, the White House said China would “significantly increase purchases of United States goods and services” to reduce the trade deficit in goods, though no details were released.
The timing also puts increased pressure on planned talks between U.S. Commerce Secretary Wilbur Ross and his Chinese counterpart, which are slated to take place next week.
And the tariffs are just one of three steps the U.S. is planning to take against China. The White House said the U.S. will also restrict specific investments and impose export controls. Details on both measures are to be announced by June 30.
Further, the White House said the USTR will continue to seek WTO dispute settlement over what it calls China’s “discriminatory technology licensing requirements.”
While the president has made it clear that he sees these actions as a way to level the playing field for what the U.S. Census Bureau estimates to have been a $375 billion trade deficit in 2017, retail leaders see it quite differently.
“The President’s announcement to move forward on imposing the Section 301 tariffs puts American consumers on the hook for the misdeeds of Chinese companies,” said Hun Quach, vice president of international trade for the Retail Industry Leaders Association, adding U.S. business are getting “whiplash” with the constant will he-or-won’t-he back and forth. “We support the Administration’s decision to hold China accountable for their bad behavior. But retailers strongly believe igniting a global trade war will cause casualties.”
The National Retail Federation estimates the trade war would reduce U.S. gross domestic product by nearly $3 billion and eliminate 134,000 jobs.
“We’re disappointed the administration has announced plans to move ahead with tariffs, which will lead to higher costs for consumers, fewer jobs and retaliation. China’s trade practices raise serious concerns, but job-killing tariffs aren’t the answer,” said NRF president and CEO Matthew Shay, adding he wants to see different objectives and solutions heading into next week’s talks. “The lack of clarity surrounding the administration’s plans is creating significant uncertainty for American businesses, disrupting supply chains and threatening to undermine the economic gains we’ve seen over the past year.”