US proposes tariffs on $200 billion more in Chinese imports

WASHINGTON (AP)—The Trump administration is readying tariffs on another $200 billion in Chinese imports, ranging from burglar alarms to mackerel, escalating a trade war between the world’s two biggest economies.

The Office of the U.S. Trade Representative proposed 10 percent tariffs July 10 on a list of 6,031 Chinese product lines.

The office will accept public comments and hold hearings on the plan Aug. 20 to 23 before reaching a decision after Aug. 31, according to a senior administration official who briefed reporters on condition of anonymity.

The U.S. July 6 imposed 25 percent tariffs on $34 billion in Chinese products, and Beijing responded by hitting the same amount of U.S. imports.

The administration said the new levies are a response to China’s decision to retaliate against the first round of U.S. tariffs.

President Donald Trump has threatened to tax as much as $550 billion in Chinese products—an amount that exceeds America’s total imports from China last year.

The United States complains that China uses predatory practices in a push to challenge American technological dominance. Chinese tactics, the administration says, include outright cybertheft and forcing U.S. companies to hand over technology in exchange for access to the Chinese market.

The initial U.S. tariff list focused on Chinese industrial products in an attempt to limit the impact on American consumers. By expanding the list, the administration is beginning to hit products that U.S. households buy, including such things as electric lamps and fish sticks.

Almost immediately after the USTR announcement, China’s government vowed to take “firm and forceful measures” over the U.S. tariff threat.

China’s options

China gave no details, but it has plenty of options to retaliate that could extend beyond additional tariffs on U.S. imports. There are fears that Beijing could attempt to disrupt operations of American automakers, retailers and others that see China as a key market.

The abrupt escalation is “totally unacceptable,” said a Commerce Ministry statement. It said Beijing would take unspecified “necessary countermeasures” to protect its “core interests.”

American Soybean Association president and Iowa soybean farmer John Heisdorffer said in a statement, “While trade tensions with U.S. soy’s largest customer continue to escalate, soy growers from across 30 states are in Washington, talking with the members of the administration and Congress, urging them to rescind these tariffs and bring a sense of stability and certainty back to farmers who depend on trade.

“The announcement of additional tariffs on China is a move in the opposite direction. We’re focused on increasing trade opportunities and keeping the robust and growing Chinese market we have worked for decades to secure. Our message to the administration and lawmakers remains the same: these tariffs needlessly hurt soy growers and rural communities.”

Congress starting to balk

Members of Congress are increasingly questioning Trump’s tactics. They warned tariffs on imports raise consumer prices and expose U.S. farmers and manufacturers to retaliation.

Lawmakers went on record July 11 to express their frustration with the administration’s growing use of tariffs as the Senate passed a nonbinding resolution designed to give Congress more say about trade penalties imposed in the name of national security.

The measure, which passed by an 88-to-11 vote, directs Capitol Hill negotiators trying to reconcile separate spending bills to include language giving Congress a role when such tariffs are put in place.

Those negotiators are free to ignore the Senate’s guidance, and the role that Congress would play would have to be worked out down the road. Co-authors of the resolution were Republican Sens. Bob Corker of Tennessee, Pat Toomey of Pennsylvania, and Jeff Flake of Arizona.

“In today’s polarized Washington, rarely do we see broad, bipartisan consensus on an issue,” said Corker, chairman of the Senate Foreign Relations Committee in a statement. “But today, the Senate spoke loud and clear by overwhelmingly expressing support for our efforts to ensure Congress plays its appropriate role in the implementation of national security-designated tariffs.”

Midwest support

Among co-sponsors of the resolution were Republican Sens. Heidi Heitkamp of North Dakota, Ben Sasse of Nebraska, Jerry Moran of Kansas, as well as Sen. Claire McCaskill, D-MO.

Senate Majority Leader Mitch McConnell, R-KY, voted along with Brown in favor of the resolution.

The 11 senators who voted against the measure were Republicans from states where Trump has high approval ratings.

The U.S. Chamber of Commerce urged lawmakers to support Corker’s resolution but also pass “actual legislation” requiring congressional consent for the tariffs. The National Retail Federation said the Senate action showed the “growing bipartisan concern over the administration’s reckless trade agenda as the real-world consequences of tariffs spread in communities across the country, according to David French, a senior vice president.

China imports far less from the U.S. than the U.S. imports from China. That means China’s imports of U.S. goods are so small that Beijing “cannot match fresh U.S. tariffs,” said Vishnu Varathan of Mizuho Bank in a report.

China bought $130 billion of U.S. goods last year. Both governments have raised tariffs on $34 billion worth of each other’s goods and already said they are considering additional charges on another $16 billion. That would leave China only $80 billion for further retaliation.

Instead, Beijing has other ways to disrupt American companies’ operations. Regulators can deny or cancel licenses or launch lengthy tax, environmental or anti-monopoly investigations.

Companies are watching U.S. chipmaker Qualcomm Inc., which has waited months for Chinese regulators to decide whether to allow its proposed $44 billion acquisition of NXP Semiconductors.

On the House side, a subcommittee scheduled a hearing next week on the impact tariffs are having on U.S. agriculture and rural communities. In a letter to Rep. Kevin Brady, chairman of the House Ways and Means Committee, Democrats urged him to bring in administration officials for a trade-related hearing because Americans need answers about whether the president’s policy is working. The Democrats said the global economy is on edge and “we cannot pretend that this is business as usual.”