Trump raises stakes with new round of China tariffs

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

Report: Apple Watch, AirPods may be spared from Trump’s China tariffs

In his announcement of the tariffs on $200 billion more goods Monday night, Mr. Trump threatened to impose tariffs on an additional $267 billion in Chinese goods, if the country retaliated.

China has said it's ready to impose retaliatory tariffs on USA goods.

In an earlier round of tariffs on $50 billion of goods, the Trump administration removed proposals on flat-panel television sets for the final list in June.

US President Donald Trump has said he will impose 10 percent US tariffs on about $200bn worth of Chinese imports, but he spared some consumer products.

However, senior administration officials told reporters the initial list announced in July was reduced by 300 product lines after the administration received 6,000 written comments from consumers and businesses.

Trump kicked off his trade war with China in March, imposing higher tariffs after an investigation by Trade Representative Robert Lighthizer had found that China used foreign ownership restrictions to require tech transfers from United States to Chinese companies, as well as conducting espionage to acquire intellectual property.

"China needs to show that it will stand up to Trump and the United States in order to demonstrate to the rest of the world that it is now America's rival", said Shaun Rein, managing director at the China Market Research Group in Shanghai. The Office of the U.S. Trade Representative charged in a March report that China is using predatory tactics to obtain foreign technology, including hacking U.S. companies to steal their trade secrets and forcing them to turn over their know-how in exchange for access to the Chinese market.

The tariffs will start at 10 per cent and rise to 25 per cent starting January 1.

Collection of tariffs on the long-anticipated US list will start on September 24 but the rate will increase to 25 percent by the end of 2018, allowing USA companies some time to adjust their supply chains to alternate countries. That would mean imposing new taxes on all of the goods the USA imports from China.

Despite the changes, the new tariffs still will cover about US$200 billion worth of additional Chinese goods, as part of an intensifying trade dispute between the world's two largest economies.

According to Reuters, smart watches from Apple and Fitbit, as well as some consumer safety products, such as bicycle helmets and baby vehicle seats, are exempt from the new tariffs.

"This is the sixth or seventh time we talked about this particular round of tariffs", said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

The Trump administration is expected to spare three Apple products from the next round of tariffs, but escalating conflicts with China could still be a costly problem for the tech giant should a full-blown trade war ensue.

"Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive".

The message will be especially poignant to Canada, with which the U.S.is now engaged in a trade stand-off, and Europe, a heavy bearer of steep steel and aluminum tariffs introduced earlier in the year by the president.

Oil prices rebounded from earlier losses as supply concerns outweighed assurances from Washington that Saudi Arabia, Russia and the United States can raise output fast enough to offset falling supplies from Iran and elsewhere.

According to an analysis by Bloomberg, the new tariffs will have an impact on Beijing, eroding 0.5 percentage point off China's 2018 GDP growth.

Chinese President Xi Jinping has refused to budge amid mounting threats from Trump, who vowed to place higher border taxes on practically everything the United States buys from China if Beijing unveils new duties, effective Monday at noon.

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