As expected China has responded to the latest round of tariff announcements by the U.S. to impose 10% tariffs on some $300 billion of Chinese goods imported to the U.S. The recent developments have the U.S. creating Lists 4A and 4B with the 4A goods tariff increases starting September 1st and the 4B items being subject to the additional 10% on December 15, 2019.
Today China announced a further retaliation of additional duties on $75 billion worth of U.S. goods will be subject to tariff increases of 5% or 10%. These new tariffs are also scheduled to be implemented in two phases as of Sept. 1 and December 15, 2019.
The rhetoric has been further raised today with the President tweeting that American companies are "ordered to immediately start looking for an alternative to China." This tweet has no real teeth of course, but the atmosphere does not appear to be one that supports serious negotiations to resolve differences. Administration officials have indicated that discussions will be ongoing.
Many business groups have been lobbying in Washington to get some semblance of order in trade policy, both with regard to China as well as other partners like Canada, Mexico and the EU to head off further potential trade war volleys. As a reminder, September 30, 2019 is the cutoff date for filing exclusion requests for the tariff increases on List 3 goods which were raised from 10% to 25% on May 10 of this year.
We will continue to monitor trade war developments and keep you advised.