On July 10th, US time, according to Trump's previous instructions, the US Trade Representative Office published a list of 6031 goods imported from China with a total tariff of about US$200 billion.
1 Which exports of China are affected more?
In addition to labor-intensive products such as clothing, shoes and umbrellas, the $200 billion tariff list covers almost all types of export goods. On July 10, USTR announced a list of goods in accordance with HTS-8, a total of 6031 kinds of goods, the total amount reached 2017 US imports of 200 billion U.S. dollars from China accounted for 8.8% of China’s total export value of 2.26 trillion U.S. dollars in 2017. In addition to the previously announced US$50 billion in commodities, U.S. products that have imposed tariffs on China have already accounted for all of China’s exports. 11%. Of the 200 billion US dollars announced this time, according to the first two HTS codes, 81 of the 98 categories of goods were included in the tariff list, and only 17 categories of products were 'survived'.
The 'hardest hit' of the tariff list is still the 'Made in China 2025' related industry export commodities. From the perspective of export value, the highest value of motor, electrical, audio-visual equipment and accessories is $48.8 billion. The proportion of nuclear reactors, boilers, machinery and parts exports reached US$38.37 billion. The export value of vehicles and their accessories reached US$11.64 billion. The above three categories of goods were announced on June 15th. The US dollar list also occupies the top four positions, which once again confirms that the United States imposes tariffs on China mainly for the 'Made in China 2025 Plan' related industries.
Compared with the first round of 50 billion, the biggest difference in this tariff list is the addition of final consumer goods such as furniture and leather bags. Compared with the previous 50 billion US dollars, the intermediates and capital goods are the main items. And some of China’s final consumer goods exported to the United States, such as furniture, bedding, lamps, mobile homes, etc., have been listed on the tariff list for US$29.17 billion, labor intensively not covered by the first tariff list such as leather bags, hats, etc. Type products have also been included in this tariff list.
Exports of zinc, tin and its products and footwear, furniture and other labor-intensive products are highly affected. From the perspective of proportion, zinc and its products, tin and its products, caps and their parts, furniture, bedding, lamps, etc. Although the amount is not as high as that of electrical equipment, it accounts for a larger proportion of China's exports in this category in 2017, and the degree of impact is deeper. Among them, caps, their parts and furniture, bedding, etc. are not only subject to higher tariffs. And accounted for a large proportion of the total exports of the industry, reaching 35% and 32.8% respectively.
From the perspective of specific commodities (according to the 8-digit code classified by HTS), the tariff list covers the top 10 products with the highest amount of 'Made in China 2025' and furniture products, such as exchange and routing, printed circuit components ( No cathode ray tube), automation data processor accessories, static converters (such as rectifiers) and metal furniture.
2 What is the impact of the tariff list on US companies and consumers?
Labor-intensive products in the tariff list account for a higher proportion of US imports from the world. From the US perspective, even after tariffs are imposed, companies and consumers can choose to import substitutes from other countries, but in the short term, they will still make multinational companies and Domestic consumers in the United States suffer losses. From the list of goods subject to tariffs, labor-intensive goods such as hats, furniture, leather bags, and knitwear have surpassed the United States to import 40% of such goods from the world. Compared with the previous 50 billion tariff list, which mainly harms US companies, especially those produced in China, this tariff list also hurts US consumers and may boost US domestic inflation.
3 How will the follow-up Sino-US economic and trade game evolve?
After the USTR announces the tariff list, a public hearing will be held on August 20th, and participants will be required to submit post-hearing rebuttal comments by August 30. Refer to the first round of USTR. The proposed tax list will be announced on April 6th, and the final list will be announced on June 15. This round is expected to last 2-3 months from the list of recommendations to the final landing.
Trump previously claimed that if China takes revenge measures, he will escalate the trade conflict to Chinese goods worth about 500 billion US dollars. The USTR pointed out in the statement that the reason for proposing a 200 billion US dollar tariff list is that China has adopted 50 billion yuan. The US dollar's reciprocal retaliatory measures. Compared with the first round of China's immediate list of tariffs of the same size, the Ministry of Commerce only indicated that it would 'make necessary counter-measures' and 'additional prosecutions to the World Trade Organization'. In the process of upgrading the trade war, China still announced the negative list of foreign investment and the negative list of free trade zones on June 28 and 30, respectively, and greatly relaxed the market access for foreign investment. The easing of China’s attitude helps to avoid Sino-US trade. The friction trend is fully intensified.
For the United States, the overall shift in China’s engagement policy means that a tough attitude toward China is the consensus of all levels of the United States, indicating that the United States can accept short-term damage to the economy to a certain extent and force China to do industrial policy and intellectual property protection. The concession policy has already attracted opposition from the US business community, after Congress has proposed to limit the president’s ability to adopt tariff measures on trade. The tariff list is larger and almost unrecognized in the first round. Final consumer goods are subject to tariffs (only 1% of the final round of consumer goods in the first round of tariff measures), which will also harm the interests of US consumers. The second round of measures will lead to more comprehensive opposition in the United States, and even will come from Congress. Restriction.
The acceleration of the US economy is the spur of Trump's 'customs war'. The downward pressure on the US economy in the second half of the year will also constrain Trump's 'tariff war'. In terms of demand side split, equipment investment is support 2016. The core driving force of the US economic recovery so far, the Philadelphia Fed’s capital expenditure expectations and other sentiment indicators peaked at the beginning of the year, indicating that US investment will drag down the downward pressure on the economy in the second half of the year. The minutes of the Fed’s June meeting on interest rates show that the Fed’s decision makers have Start to discuss the US bond yield curve flattening and economic recession risk. When faced with the no longer strong economic growth, whether the Trump government's big fight 'tariff war' can still have such a strong atmosphere, remains to be seen.
