New US tariffs on Chinese goods will be different

Although US tariffs on Chinese imports can seem routine, two rounds due by yearend will differ importantly from their predecessors.

The Trump administration on Aug. 13 published plans to impose duties of 10% on $112 billion of Chinese goods Sept. 1 and on $160 billion of different products Dec. 15.

“For the first time, Trump’s trade war is likely to directly raise prices for a lot of household budget items like clothing, shoes, toys, and consumer electronics,” wrote Chad P. Bown of the Peterson Institute for International Economics in an Aug. 14 blog post.

Bown listed “five things you need to know” about the coming tariffs:

● US tariffs on China continue to rise in a series of steps Trump started in January 2018. The average rate is 18.3% now. It will rise to 20.0% on Sept. 1 and to 21.4% on Dec. 15. Before the trade war, the average rate was 3.1%.

● The Sept. 1 round will hit imports of goods not directly targeted before, of which more than a third will be footwear, clothing, and textiles. Most tariffs imposed earlier applied to unfinished goods.

● The Dec. 15 tariffs target previously unaffected imports from China including many consumer electronics and toys.

● The administration might have scheduled the new tariff rounds for after seasonal inventory build-ups to shield holiday shopping from the effects.

● After the second round, almost all US imported goods from China will be covered by Trump’s tariffs.

Bown called timing of the new tariffs “the only minor consolation,” explaining, “President Trump may be coming around, albeit belatedly, to the economic evidence on the costs of his trade war.”

But recognizing the costs of a trade war, Bown wrote, might mean that the president “is also planning for his tariffs to stay.”

While insisting during his 2016 presidential campaign that trade wars were easy to win, after all, Trump never said how long they needed to last—or how much his would cost Americans.