Section 301 Tariffs from the US and Retaliation by China Set for Friday, July 6

As a result of the finding that Chinese Intellectual Property practices are ‘Unreasonable or Discriminatory and Burden or Restrict US Commerce’, the Trump Administration is set to impose 25% tariffs on $34 billion in imports from China (List 1).  There is a threat of an additional $16 billion to be imposed at a future date (List 2).

Scope of Products: The two lists together are focused almost entirely on manufactured products, with an even greater focus on industrial manufacturing products than the earlier draft. The focus remains on products that may benefit from Chinese industrial policies, with China’s Made in China 2025 as the big focus. According to USTR’s notice, the targets included industries such as industrial machinery, automobiles, aerospace, robotics, and information technology, though excludes “goods commonly purchased by American consumers.” The two lists, taken together, include:

  • Structural use of iron, steel and aluminum (8)
  • Rail locomotives and equipment (86)
  • Automotive and vehicle parts (87)
  • Aerospace products and parts (88) and ships and boats (89)
  • Nuclear equipment and other machinery (84)
  • Electrical machinery and equipment (85)
  • Optical, measurement and medical instruments and parts (90)
  • Plastics (39)
  • Lubricating oils and greases (27, 34 and 38)
  • Glass rods (70)

Likewise, China China’s Ministry of Finance responded immediately, announcing specific lists of retaliatory tariffs in the same amounts, including an initial list of 545 tariff lines for US exports worth $34 billion on which 25 percent tariffs would be imposed starting this Friday. Like USTR’s announcement, China’s also included a second list of products worth $16 billion in US exports, with 114 proposed tariff lines.  These lists are much more focused on agriculture and consumer products.  There are NO rod, wire or wire products on these retaliation lists.