Trump Threatens Additional Tariffs on $267 Billion of Chinese Goods

Glen Norman
September 11, 2018

President Trump tweeted on Saturday that Apple should manufacture its products in the United States, instead of China.

A public comment period ended late on Thursday on a $200 billion list of consumer and other Chinese goods that would be subject to tariffs of 10 percent to 25 percent.

And then he went further, saying he's also ready to hit another 267 billion worth of imports right after.

"The US$200 billion we are talking about could take place very soon depending on what happens with them".

"That totally changes the equation", Trump said.

The dollar gained around 0.4 percent against China's off-shore traded yuan following Trump's comments. The letter also made no mention of Apple's iPad, which brought in US$19.2 billion in sales in the most recent year, or most of its Mac computers, which generated US$25.8 billion. The administration should cease further tariffs actions and give another shot at talks for a trade deal with with China, it said.

Trump said Friday that the timing of the tariffs on the $200bn worth of goods is not yet final. It makes many of its products for the USA market in China, and it also sells gadgets including the iPhone in China, making them a potential target for Chinese retaliation against the Trump tariffs. The Office of the U.S. Trade Representative (USTR) as of press time has not released a list of what goods could be affected.

The President told reporters aboard Air Force One on Friday that he may expand his proposed tariffs as part of his ongoing trade war with China in which the two nations ramp up costs on each other's exports.

Apple doesn't actually run its own factories in China, but uses contract manufacturers like Foxconn to build the iPhone and other products. On Twitter, Trade lawyer Scott Lincicome pointed out that an iPhone would be more expensive to manufacture here in the U.S., citing a Marketplace report from 2014 that suggested that the component cost of an iPhone in China was around $190 per phone.

Trump's threatened tariffs, now totaling $517 billion in Chinese goods, would exceed the $505 billion in goods imported from China previous year. It said in a late submission that its AirPods headphones, some of Apple's Beats headphones, and its new HomePod smart speaker would face levies, causing its shares to slip in late trading.

In its filing, Apple challenged that approach, writing that "it is hard to see how tariffs that hurt US companies and USA consumers will advance the Government's objectives with respect to China's technology policies". With Beijing already indicating that they would retaliate if additional tariffs are confirmed, investors are being reminded that the prolonged trade tensions are simply refusing to go away.

In the absence of its strategy to minimize its economy's intake of us goods and services, the near-zero growth rate of China's imports of usa goods in July 2018 would be consistent with recessionary conditions being present in that country, which was certainly suggested in early 2018 prior to the implementation of any new tariffs being imposed by either nation on the other's goods.

Dell, Cisco, Juniper Networks and Hewlett Packard Enterprise warn the new taxes could result in United States job losses. The US products targeted by China include coal, copper scrap, fuel, buses and medical equipment. That would mean penalties cover nearly all goods from China sold to the United States. "We want lower (trade) barriers across the board", Kudlow said.

"Those have been our asks for many months and so far those asks have not been satisfied", he said.

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