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US to impose 25% tariff on $16B of Chinese goods on Aug. 23

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US to impose 25% tariff on $16B of Chinese goods on Aug. 23

Despite widespread outcry from American companies that may suffer as a result of more tariff impositions, the Trump administration said Aug. 7 that it would move forward with imposing 25% tariffs on $16 billion of Chinese imports, marking the latest development in the ongoing trade war between the two nations.

The U.S. Trade Representative's Office said the tariffs would go into effect Aug. 23, while noting that it had removed five of the original 284 tariff lines included in its proposed list of targeted products announced June 15.

The products included under the original target list included many types of electronics, chemical and consumer products, including semiconductors, tractors, electric motors, remote controls, e-cigarettes, fans and charging cables.

The tariffs on $16 billion of Chinese goods mark the second tranche of U.S.-imposed tariffs on imports from China. The first tranche, which went into effect July 6, targeted $34 billion of Chinese goods with a 25% tariff, and coupled with the $16 billion measure, bring the total to $50 billion of Chinese products targeted with tariffs as a result of a Section 301 investigation into Chinese trading practices.

The investigation found that China engaged in market distorting practices, including forced technology transfer from American companies doing business in China, which the administration has used as a justification for the tariffs.

The USTR office also said it would hold an exclusion process for American companies and individuals seeking exemption from the $16 billion measure in the same manner that it did for the first $34 billion tranche. More than 50 witnesses testified in two days of hearings July 24-25 on the $16 billion tranche, with the vast majority expressing concern that manufacturing and consumer costs would go up as a result of implementation.

A separate 25% tariff on $200 billion of Chinese goods is also being weighed by the Trump administration. Public hearings on that measure, which would target many consumer products including mattresses, furniture, handbags and appliances, are scheduled for Aug. 20-23.

China has threatened to strike back with its own tariffs ranging from 5% to 25% on $60 billion of U.S. exports should the U.S. follow through with the latter measure.