U.S. begins collecting higher tariffs on Chinese goods arriving by sea

[jetray]

So it begins,


U.S. begins collecting higher tariffs on Chinese goods arriving by sea
Reuters ReutersJune 1, 2019




Containers are seen at a port in Huaian
Containers are seen at a port in Huaian, Jiangsu province, China May 5, 2019. Picture taken May 5, 2019. REUTERS/Stringer
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WASHINGTON (Reuters) - The United States began collecting higher, 25% tariffs on many Chinese goods arriving in U.S. seaports on Saturday morning in an intensification of the trade war between the world's two largest economies and drawing retaliation from Beijing.

U.S. President Donald Trump imposed the tariff increase on a$200 billion list of Chinese goods on May 10, but had allowed a grace period for sea-borne cargoes that departed China before that date, keeping them at the prior, 10% duty rate.

The U.S. Trade Representative's office in a May 15 Federal Register notice set a June 1 deadline for those goods to arrive in the United States, after which U.S. Customs and Border protection would begin collecting the 25% duty rate at U.S. ports. The deadline expired at 12:01 a.m. EDT on Saturday

The tariff increase affects a broad range of consumer goods, and intermediate components from China including internet modems and routers, printed circuit boards, furniture, vacuum cleaners and lighting products.

Earlier on Saturday, China began collecting higher retaliatory tariffs on much of a $60 billion target list of U.S. goods. The tariffs, announced on May 13 and taking effect as of midnight in Beijing (1600 GMT), apply additional 20% or 25% tariffs on more than half of the 5,140 U.S. products targeted. Beijing had previously imposed additional rates of 5% or 10% on the targeted goods.

No further trade talks between top Chinese and U.S. negotiators have been scheduled since the last round ended in a stalemate on May 10, the same day when Trump announced higher tariffs on $200 billion of Chinese goods and then took steps to levy duties on all remaining Chinese imports.

China ordered the latest tariff increases in response to Trump's move.

Trump has accused China of breaking a deal to settle their trade dispute by reneging on earlier commitments made during months of negotiations. China has denied the allegations.

Beijing has grown more strident in recent weeks, accusing Washington of lacking sincerity and vowing that it will not cave to the Trump administration's demands.

Its rhetoric has hardened particularly since Washington put Chinese company Huawei Technologies Co Ltd on a blacklist that effectively bans the firm from doing business with U.S. companies.



(Reporting David Lawder in Washington and Stella Qiu and Se Young Lee in Beijing; editing by Grant McCool)

https://finance.yahoo.com/news/u-begins-collecting-higher-tariffs-104755661.html

 

[bobsm]

Increasing tariffs on China will likely hurt US growth, says Nomura
PUBLISHED TUE, MAY 28 2019 12:16 AM EDTUPDATED TUE, MAY 28 2019 9:14 AM EDT
Yen Nee Lee

* Imposing 25% tariff on all Chinese goods that enter American borders will likely hurt U.S. economic growth, said Lewis Alexander, chief U.S. economist at Nomura.

*Those tariff increases could also cause core inflation in the U.S. to tick up by 0.5 percentage point over the next 12 months, Alexander said.

*U.S. President Donald Trump claims that tariffs have meant China is paying billions of dollars that ultimately boost the American economy. Economists say that isn’t the case.

The US and China seem to be preparing for a prolonged trade conflict, said economist

Raising tariffs on all Chinese goods that enter American borders will likely hurt U.S. economic growth, which has already shown signs of slowing in recent months, according to Japanese financial firm Nomura.

President Donald Trump has claimed on several occasions that the U.S. has collected billions of dollars in tariffs paid by the Chinese, which partly contributed to the strong American economy. Economics experts say that’s not, in fact, how tariffs work, and Nomura’s chief U.S. economist, Lewis Alexander, said Tuesday the net impact of the trade fight is likely negative for America.

Tensions between the U.S. and China escalated earlier this month, when Trump announced an increase in tariffs on $200 billion of Chinese goods from 10% to 25%. He also threatened to apply 25% tariffs on the remaining imports from China worth around $300 billion.

Beijing retaliated by raising levies on $60 billion worth of American products.

Donald J. Trump
✔
@realDonaldTrump
· May 5, 2019
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars....


Donald J. Trump
✔
@realDonaldTrump
....of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!

76.9K
9:38 PM - May 5, 2019
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26.5K people are talking about this

Alexander said there’s evidence that tariffs collected by the U.S. government are being paid by American firms and consumers, rather than the Chinese. “And frankly, on net, it’s likely to be a drag on U.S. growth rather than neutral,” he told CNBC at the Nomura Investment Forum Asia in Singapore.

Governments collect import tariffs from companies that bring in the goods, so Trump’s tariffs on Chinese goods are typically paid by American importers. That said, the cost of those tariffs can get passed on to anyone from the original manufacturer in China to a consumer in a U.S. store.

The exact cost distribution of the current trade war remains unclear, but research published by the New York Federal Reserve Bank estimated that U.S. tariffs on China will cost the typical American household $831 per year.

The continued tariff fight between the U.S. and China — the world’s two largest economies — comes at a time when the American economy is “clearly slowing,” Alexander said. He added that “the biggest thing” that will affect U.S. economic growth and decisions by the Federal Reserve is how trade developments affect business confidence and investments in the coming months.

Fed to stay on hold

Still, the potential hits to the U.S. economy don’t justify a rate cut by the Fed, according to Alexander. He explained that if the U.S. moves ahead to impose 25% tariffs on all Chinese goods, core inflation in America could tick up by 0.5 percentage point over the next 12 months.

Central banks globally typically cut interest rates to stimulate economic activity and stoke inflation. Lowering rates while inflation is inching up puts an economy at risk of overheating, which is often a precursor to a painful downturn.

Fed’s wait-and-see attitude is ‘on the mark,’ economist says

Alexander is not the only one expecting the Fed to keep interest rates steady. Carmen Reinhart, a professor at the Harvard Kennedy School, also said the U.S. central bank is right to stay patient in making any interest rate movements.

“We cannot lose sight that the U.S. unemployment rate is the lowest since the 60s, the economy — by any metric — is still operating close to full employment,” Reinhart told CNBC on Tuesday at the Nomura forum.

“The Fed’s wait-and-see attitude is really on the mark,” she added.


https://www.cnbc.com/2019/05/28/tru...y-hurt-us-economy-fed-set-to-hold-nomura.html