On Wednesday, April 4, China unveiled its plans to impose new tariffs on U.S. products, escalating the trade dispute between the world’s two largest trading nations. The Chinese Ministry of Commerce released its plan to put a 25% tariff on 106 U.S. products worth $50 billion. The products include soybeans, automobiles, chemicals and aircraft, which span many industries, creating more anxiety for many U.S. companies and investors.
This hardline trade stance was a direct response to a plan released Tuesday by the Trump administration announcing its intension to impose 25% tariffs on roughly 1,300 Chinese exports focused on industrial machinery and technology. The list of exports is worth about $50 billion, as well. However, China’s response was tougher than what the market was expecting. Bloomberg reports futures on both the Dow Jones Industrial Average and S&P 500 fell more than 1 percent Wednesday morning.
Importantly, China’s plan against the U.S. strikes at the core of trade relations between the two world’s largest economies. For example, China is the world’s largest soybean importer and biggest buyer of U.S. soybeans in trade worth about $14 billion last year. However, U.S. Commerce Secretary Wilbur Ross said their decision is not expected to disrupt the U.S. economy and even mentioned he is still open to a negotiated solution.
Though today China announced it has taken the first step in challenging the U.S. trade restrictions at the World Trade Organization, the implementation date of China’s tariffs depends on bilateral negotiations and when the U.S. intends to apply its own tariffs. The U.S. Trade Representative has announced the upcoming dates for consideration of public input before enacting the U.S.’s tariff decisions:
- April 23, 2018: Due date for filing requests to appear and a summary of expected testimony at the public hearing and for filing pre-hearing submissions.
- May 11, 2018: Due date for submission of written comments.
- May 15, 2018: The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission.
- May 22, 2018: Due date for submission of post-hearing rebuttal comments.