US could announce blanket tariffs on Chinese goods this December

US could announce blanket tariffs on Chinese goods this December

30/10/18

Indira Zahra-Aridati, Business and Policy Intern

US President Donald Trump is set to announce tariffs on all remaining Chinese imports by early December if trade negotiations fail to make a breakthrough, Bloomberg reports.

According to CNBC, the new tariffs – which will follow those already levied by the US on some US$250 billion worth of Chinese products – could come in to effect in early February. The potential tariffs will hit consumer products and capital goods worth an additional US$257 billion.

The development comes ahead of a planned last-ditch meeting between President Trump and Chinese President Xi Jinping on the sidelines of the G20 Summit in Buenos Aires, to be held in November. It can be interpreted as a White House play to exert maximum pressure on Beijing going in to those talks. Last week, reports indicated that the US has no interest in making concessions to China unless Beijing moves first to address Washington’s concerns over IP use.

BBC News reports an immediate slump in US stock indexes in response to renewed tariff threats, with the Dow Jones Industrial Average down 0.45 per cent this morning (Tuesday), the tech-heavy Nasdaq down over 1.1 per cent, and the S&P 500 down 0.6 per cent. Individual company shares were also hit, as companies like Netflix, Alphabet, Amazon and Boeing saw heavy share-price losses amid rising investor concerns over slowing global economic growth, the rising trade tensions and higher interest rates, driven by the US Federal Reserve.

A recent report conducted by the European Union Chamber of Commerce in China found that the impact of the US-China trade war is “causing significant disruptions to global supply chains”.

Chinese state media Xinhua reports that US companies operating in China have said they will be hurt by tariffs more than their Chinese counterparts. Non-US and non-Chinese companies, fearing the impact of the trade war, are moving parts of their supply chains out of both countries, according to the South China Morning Post, and Southeast Asian countries are likely to be primary alternatives for businesses planning relocation strategies.