Kieran Davies | Coolabah Capital
The US government’s decision to impose punitive tariffs on all its trading partners included a 34% tariff for China, in addition to the two 10% tariff hikes implemented last month.
This brings the cumulative increase in US tariffs on Chinese imports to 54%, close to the 60% increase promised by Trump during last year’s election campaign (note that the effective increase is higher for low-value imports from China because these will now be taxed rather than remaining duty-free).
Combining these three increases raises the total tariff rate on US imports of Chinese goods from an estimated pre-Trump level of 22% to around 76%.
There were also large US tariffs imposed on countries that had benefitted from attempts to relocate production out of China, such as Vietnam (a 46% tariff), Thailand (36%), and Cambodia (49%).
All this places pressure on China to make a strong retaliatory response, where to date it has made relatively minor changes to tariffs on select imports from US, restricted some US companies from operating in China, restricted the sale of rare commodities used in high-end manufacturing, and launched an antitrust investigation into Google.
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