Tariff Tiff Escalates Between China and the U.S.

Last week, the tariff conflict between China and the U.S. escalated, with the U.S. declaring that it intends to hit 1,300 more Chinese products with 25 percent tariffs. Soon after, China retaliated, announcing plans to impose 25-percent tariffs on 106 U.S. exports, worth $50 billion annually.

The U.S.-proposed tariffs on Chinese goods include televisions and motorcycles.

China’s proposed tariffs on U.S. goods include automobiles, which could affect some firms such as Tesla that don’t manufacture in that country. However, Ford and General Motors have manufacturing joint ventures in China that probably wouldn’t be affected.

Since 2009, China has been the world’s largest new car market and automobile producer. The country’s automotive import and export industry accounted for one-quarter of global production capacity as of 2011, according to a report from Statista.

In 2017, the U.S. exported nearly 270,000 light trucks and vehicles to China, according to Statista research. That’s down from about 315,000 in 2014.

The White House has said that the proposed tariffs are in response to an investigation into alleged intellectual property infringement by the Chinese.

The latest tit-for-tat tariffs come days after the Chinese government announced $3 billion in tariffs on U.S. goods, including pork and steel pipes, which came after the U.S. imposed tariffs of 25 percent on steel imports and 10 percent on aluminum imports from all countries. That list of countries has since been narrowed, but still includes China.


It is unclear when the newly proposed tariffs would take effect, but the Chinese Vice Finance Minister Zhu Guangyao said in a news conference, “It is time for the U.S. administration to change sides back to the right track, keep real dialogue with the Chinese side. We hope that we can work together.”

There has been no indication that the U.S. government will back down. The president tweeted last week, “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!”

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