On August 1 President Trump announced through a series of tweets that on September 1 a 10% tariff will be placed on the remaining $300 billion of goods exported from China. The President cited China's unfulfilled promises of increased agricultural purchases from the U.S. At the time of the announcement, List 4 was not yet available.
On August 13 the Administration backed off the Sept. 1 deadline for products including laptops, cell phones and other consumer goods. Yesterday, August 20th, the U.S. Trade Representative posted a Federal Register notice on Section 301 List 4 tariffs. The notice includes two lists as the Administration indicated would be created last week.
List 4A represents goods with a tariff rate of 10% that be implemented as originally scheduled on Sept. 1 and List 4B represents those goods which have a delayed tariff implementation date of Dec. 15. Reuters reported the delayed goods represent about half of the $300 billion worth of goods targeted. "We're doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers," Trump told reporters.
The Federal Register Notice further clarifies that List 4A, which begins Sept. 1, includes products where China's share of U.S. imports from the world is less than 75%. List 4B, which begins Dec. 15, includes products where China's share of U.S. imports from the world is 75% or greater.
The Federal Register Notice further goes on to say, "USTR will publish a separate notice describing the product exclusion process, including the procedures for submitting exclusion requests, and an opportunity for interested persons to submit oppositions to a request."
In response to President Trump's claims of unfulfilled agricultural product purchases, Reuters reports an official from China’s National Development and Reform Commission (NDRC) commented the accusation was “groundless." The Administration then labeled China a currency manipulator, which the Washington Post "is mostly symbolic, requiring the U.S. Administration to consult with the International Monetary Fund to try to eliminate the unfair advantage the currency measures have given the country."
Since the allegation, the International Monetary Fund (IMF), according to the AP, reported that its yearly review of the Chinese economy found "...little evidence that China's central bank has deliberately reduced the value of the nation's currency." Reuters reported that Treasury Secretary Mnuchin has been seeking to further engage the International Monetary Fund on this issue, though the IMF has not yet responded.
On Thursday (August 15), as USTR posted its Federal Register Notice, China responded further. The Chinese government released a single sentence statement vowing to retaliate if List 4 goes into effect. The AP reports China promised "necessary countermeasures," which were not further defined. According to Reuters, though China vowed to retaliate, the sentiment included a call to the U.S. to meet halfway on a trade deal.
September Trade Talks
Currently, China and the U.S. are scheduled to meet again in September to resume trade talks. The Wall Street Journal reported that President Trump told reporters last Friday, August 9, "We're not ready to make a deal, but we'll see what happens." Meanwhile, Politico reported the President went on to say "We'll see whether or not we keep our meeting in September." However, NTC Director Navarro reported (via Reuters) "the United States was still planning to hold another round of trade talks with Chinese negotiators." Most recently, in response to China's promise of retaliation, President Trump told reporters (via Reuters), "September, the meeting is still on as I understand it."