Tackling trade talks remains difficult for the U.S. and China as more of President Donald Trump’s tariffs go into effect today, placing a 10% tax on $200 billion of Chinese products such as furniture and appliances. According to CNBC, the tariff is expected to increase to 25% by the end of the year. This latest imposition was met with retaliation by Chinese President Xi Jinping, who said China plans to implement taxes on about $60 billion worth of U.S. imports.
The back-and-forth debacle between the world’s two largest economies has been ongoing since July when Trump put tariffs on $34 billion worth of Chinese goods, mainly industrial parts. On Sept. 24, CNBC reported that Beijing denied the U.S. president’s invitation to Washington, DC to discuss trade practices. Xi Jinpings’ recent tariffs announcement would put taxes on more than 5,200 imports, including a 10% levy on liquefied natural gas, coffee and several edible oils as well as a 5% levy on frozen vegetables, cocoa powder and chemical products.
U.S. Secretary of State Mike Pompeo recently told Fox News that if China does retaliate, Trump would implement even more tariffs on $267 billion worth of Chinese imports.
Although it is much too early to determine the effects of these tariffs, previous ones by the U.S. are showing negative impacts on certain industries. NBC News released an article last week that explored how the steel and aluminum tariffs are doing more harm than good for the U.S. auto industry. In the article, the Center for Automotive Research states car sales could drop by 2 million a year, causing a loss of 715,000 jobs and $62 billion of U.S. GDP.
“The impact could mean more than just higher costs,” the article states. “A number of medium-sized and smaller parts suppliers could be forced out of business, unable to afford the cost of relocating their operations back to the U.S.,” creating product shortages.
—Andrew Michaels, editorial associate