Apple Watch, AirPods excluded from next round of tariffs says new report

Saul Bowman
September 19, 2018

"To protect its legitimate rights and interests and order in global free trade, China is left with no choice but to retaliate simultaneously", the commerce ministry said in a brief statement, without specifying what action it would take.

The commerce ministry said the new tariffs "bring new uncertainty to the consultations between the two sides". "It is hoped that the United States will recognize the possible negative consequences of such actions and take convincing means to correct them in a timely manner", the ministry said in a statement.

But Trump warned that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports".

Altogether about 300 product categories were given reprieves, including some non-tech consumer devices such as bicycle helmets and baby auto seats. Those products will now be taxed 5 per cent. China has said it will respond to the next round of USA levies with retaliatory tariffs on $60 billion of U.S goods ranging from liquefied natural gas to aircraft.

If he does go ahead with a further $267bn worth of tariffs, it would mean virtually all of China's USA exports would be subject to new duties. The Trump administration is hoping the hard-line trade policies will pressure the Chinese into renegotiating trade deals with the U.S.

Ross also said the USA was actively pursuing action against China through the World Trade Organisation (WTO), a process the secretary said was supported by Japan and the EU.

Economists at UBS Group AG say even a 10 percent tariff would slow the United States economy in the fourth quarter by enough to stop the Federal Reserve hiking interest rates again in December.

At nearly the same time the tariff list was released in Beijing, Trump threatened more countermeasures against China if it targets politically potent U.S. agricultural products for retaliation. China has retaliated in kind. US Treasury Secretary Steven Mnuchin last week invited top Chinese officials to a new round of talks, but thus far nothing has been scheduled.

Trump said China had refused to change the unfair practices that hurt U.S. businesses and workers.

Saunders predicted that some retailers will try to shift their production out of China, but he warned that quickly changing supply chains can be costly and pose a new set of challenges.

"Under the party's strong central leadership, China has the resolve and confidence to press ahead and use deeper reforms and deeper opening up as well as the development of our domestic market to counter United States unilateralism", Li Wei said.

The tariffs "will create lasting harm to communities across the country", said Dean Garfield, president and chief executive of the Information Technology Industry Council, a trade goup that includes Apple, Amazon and other large tech firms.

Kudlow declined to specify details of the expected announcement but noted that reports indicating Trump will unveil 10 percent duties on $200 billion in imports are "more or less correct".

In announcing the US tariffs against China on Monday, President Trump said China's trade practices, such as forcing USA companies to transfer technology to Chinese firms, "plainly constitute a grave threat to the long-term health and prosperity of the United States economy".

China's yuan currency slipped against the dollar on Tuesday after news of the United States measures.

Liquefied natural gas, mineral ores, coffee and various types of edible oil will be among the U.S. products subject to the 10 percent tax.

But in a last-minute reprieve, he spared smart watches from Apple and other consumer products like bicycle helmets and baby vehicle seats from the tariffs.

Technology and retail groups had argued that the tariffs would hit consumers hard.

Trump campaigned for the presidency on a pledge to tax imports and rewrite or tear up trade agreements that he said put USA companies and workers at a disadvantage.

Fang Xinghai, a senior Chinese regulator, voiced the possibility the new tariff will "poison" the trade talks.

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