U.S. to spare Apple watch, many gadgets from new China tariffs

Jeannie Matthews
September 19, 2018

In a statement, Trump warned that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue Phase Three, which is tariffs on approximately $267 billion of additional imports".

China says it has no choice but to retaliate to U.S. President Donald Trump's 10 percent tariffs on $200 billion in Chinese goods, risking a further escalation of trade tensions between the world's two biggest economies.

Contacted on Tuesday morning, a representative for the United States Trade Representative's (USTR) office would only cite Trump's Monday statement vowing further action in response to a request for comment on China's retaliatory tariffs.

The Trump administration's threat to impose tariffs on more than US$500 billion worth of Chinese imports is likely to provoke outrage, not only from Beijing but closer to home.

"Our concern with these tariffs is that the USA will be hardest hit, and that will result in lower US growth and competitiveness and higher prices for USA consumers", Apple said earlier in a letter commenting on the proposal.

The U.S. had proposed the talks, but at the same time moved forward with planning additional tariffs on some $200 billion of Chinese products, the Journal reported.

UPDATE: President Trump has announced tariffs on another $US200 billion of Chinese goods.

Ahead of Beijing's announcement, US Commerce Secretary Wilbur Ross told CNBC that China should not have been surprised by the Trump administration's latest measures, and said "the question about whether or when to have a discussion is very importantly in [China's] ballpark".

The tariffs will hit a wide range of industrial and consumer goods.

"For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies", Trump said. The action would bring the total amount of Chinese products subject to duties to $250 billion, roughly half of the amount the U.S. imported from that country in 2017.

"Contrary to views in Washington, China can - and will - dig its heels in and we are not optimistic about the prospect for a resolution in the short term", said Zarit of the American Chamber of Commerce.

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"Its CEO Dean Garfield said in a statement: ".China must change, but this is not the way to achieve the needed market access in China.

Trump already has imposed 25 percent tariffs on $50 billion in Chinese goods.

Fang Xinghai, a senior Chinese regulator, voiced the possibility the new tariff will "poison" the trade talks.

However, some products that help computer networks operate, such as routers, will remain on the new list, the official said.

Handbags, rice and textiles will be included, but some items expected to be targeted such as smart watches and high chairs have been excluded.

In the first two rounds of tariffs, the Trump administration was careful to try to spare consumers from the direct impact of the import taxes.

"Tariffs increase the cost of our United States operations, divert our resources, and disadvantage Apple compared to foreign competitors".

The U.S. Chamber of Commerce criticized the tariffs, saying Monday that the decision "makes clear that the administration did not heed the numerous warnings from American consumers and businesses".

"It will be a lot of money coming into the coffers of the United States of America", Trump said as he announced the tariffs at the White House. "More tariffs not only punish American consumers, manufacturers, and businesses of all sizes, they will also diminish the opportunity to negotiate with the Chinese and address long-standing trade issues".

"The President really hates the bilateral trade deficit with China", Mr Scissors said.

In a filing with the government, for instance, Giant Bicycles Inc. of Newbury Park, California, noting that 94 per cent of imported bicycles came from China a year ago, complained that "there is no way our business can shift its supply chain to a new market" to avoid the tariffs and warned "a tariff increase of this magnitude will inevitably be paid for by the American consumer".

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