The Trump administration said it’s preparing tariffs on $200 billion worth of Chinese goods.
President Donald Trump warned another round of the same scale would be possible if China retaliates.
Analysts say that would likely hit cellphones, clothing, shoes, toys, and computers.
President Donald Trump announced Tuesday that tariffs on another $200 billion worth of Chinese goods are in the works, earlier warning an additional $200 billion could be targeted if Beijing retaliated on such a move.
Officials vowed they would.
So, what would another round of tariffs of that scale look like?
It would hit most of the $262 billion worth of Chinese products not yet covered on tariff lists, Deutsche Bank economists led by Zhiwei Zhang wrote in a recent note. That includes cellphones, clothing, shoes, toys, and many computers. More than 80% of Chinese computer imports to the US — or about $41.1 billion of $50.5 billion — have not yet been named on the lists.
Trump followed through with tariffs on $34 billion worth of Chinese goods last week, prompting in-kind retaliation from Beijing. His administration has another set with a trade value of $16 billion pending, which could be ready as soon as August.
The initial round of tariffs against China sought to minimize consumer effects. But the latest list under consideration is about split between capital and consumer goods, according to analysis by Nomura. It includes more than 6,000 products, ranging from bicycles to seafood.
American imports that China has a large market share over are hard to substitute. For example, that country holds more than half of the market share on American imports of leather products, furniture, and televisions.
Seth Carpenter, an economist at UBS, said the initial tariffs avoided some economic damage because the goods they targeted had readily-substitutable alternatives. But with a third round potentially adding up to $450 billion worth of duties, he said, it’s a whole new game.
“The list becomes comprehensive and supply-chain damage seems almost inevitable,” Carpenter said. “Many of the goods on the longer list are imported largely from China, making substitution essentially impossible.”
Zhang said Deutsche Bank doesn’t think the US will move forward with another $200 billion worth of tariffs on Chinese goods, but noted “high uncertainty” surrounding the situation.
But Carpenter said he expects the next round to be implemented. Resolving the trade dispute through negotiations is still possible, he added, but it’s becoming less likely.
“There is a way out but the path is narrow,” he said.
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Source:: Businessinsider – Politics