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The first major wave of US tariffs on consumer goods manufactured in China came into effect Sunday, and it will not be long before Americans pay more for many daily purchases.
The tariff list includes 90 types of boots, slippers, leather shoes and other shoes; more than 125 types of watches and clocks; various color televisions and video monitors; and hundreds of clothing items. In total, products imported from China worth about $ 110 billion are now subject to 15% tariffs.
In previous meetings, President Trump had imposed 25% duties on $ 250 billion worth of Chinese products, but it was mainly machinery and equipment and industrial parts.
This cycle is different and explains why analysts are considering these new tariffs – which will be applied to a second and largest wave of consumer goods manufactured in China in December – as an inflection point of the trade war with China.
"This is a big setback for the negotiations," said Wendy Cutler, a trade expert at the Asia Society Policy Institute, referring to Trump's tweets on Aug. 23, describing Chinese President Xi Jinping as saying. 39; "enemy" and proposing to increase customs duties. $ 300 billion mainly from consumer products from China. Trump also "ordered" US companies to leave China.
Since then, faced with the turmoil of the stock markets and the outcry sparked by American farmers and companies, Trump has quieted rhetoric even defended its erratic approach to China as a negotiating style.
Beijing, for its part, sent conciliatory signals. He has not announced any retaliatory measures as a result of Trump's latest move to raise rates from 10% to 15%. And Chinese officials said they remained open to ongoing dialogue.
This has raised optimism about the resumption of negotiations between the two parties this month, although there has been no confirmation as to when and where this would occur.
The United States and China have been battling a trade war between their genders since last spring. Trump and its business leaders are asking China to reduce its large trade surplus with the United States, open its markets and reform its industrial policies.
The financial markets, desperate for more optimistic news on the US-China trade negotiations, have recovered in recent days as signs of resumption of negotiations emerged. The next opportunity for a possible deal is likely to be in mid-November, as Trump and Xi are expected to attend the summit of Asia-Pacific Economic Cooperation leaders in Santiago de Chile.
Over the past year, Trump and Xi have met twice at such international gatherings. On both occasions, in Buenos Aires in December and in Osaka, Japan, in June, Trump agreed to a truce and announced the resumption of negotiations to end the ceasefire. fire with more tariffs months or weeks later, when the negotiations are at a standstill.
There may be another repetition of this scenario, but with each rate increase, analysts believe it will be much more difficult to resolve and reach a settlement. And despite Trump's insistence that it is the Chinese who pay the bill for its tariffs, American consumers will soon tell a different story.
Take shoes
China accounts for about 70% of all shoes sold in the United States. As of Sunday, about half of the shoes made in China entering US borders will be subject to an additional 15% tariff. The remaining shoes are subject to 15% tariffs as of December 15, as well as mobile phones, laptops, toys and billions of dollars of other products from China.
Comfort One Shoes, which operates 16 stores in the states of Maryland, Virginia and Washington, sells mostly high-end shoes from Europe. But about a quarter of his goods are imported from China. Garrett Breton, a partner at Comfort One, said that customers could expect a price increase of about 10% on these shoes as early as October.
"Looks like [shoe manufacturers and wholesalers] eat some of it and absorb a lot of it, "said Breton, who had just returned from a trade show.
Retailers usually sell shoes at double the wholesale price, which means that an increase of $ 5 related to the price of a pair of $ 50 shoes at the wholesale level will cost the customer the retail 10 € more at the checkout.
In a letter last week, more than 200 US shoe companies appealed to Trump, unsuccessfully, to cancel the new consumer goods tariffs. "We are very concerned that this tariff measure will create additional economic uncertainty. An economic slowdown will deprive US consumers of disposable income, even though they have to pay more for products, "the letter reads.
The risks of recession have increased recently with the escalation of the trade war and analysts continue to bet that this threat will prompt Trump to reach an agreement with China, if only to avoid undermining its bid for the re-election.
Mickey Kantor, President Clinton's chief negotiator and now a lawyer at Mayer Brown's Los Angeles office, is worried that time is running out. If the two sides do not reach an agreement by the end of the year, he said, "I imagine it would be very difficult to reach during an election year."
Kantor is also Chairman of Lexmark International Inc., a manufacturer of laser printers in southern China. Prices on these printers increased by 15% Sunday, along with many other electronic products from China.
"It's going to be difficult," said Kantor. The company is considering "everything from price increases until distributors absorb some of the inflated prices and / or
or in manufacturing displacement. "
Trump has announced tariffs on all goods imported from China, which totaled about $ 540 billion last year. Chinese imports fell from about 12% until June of this year. US exports to China fell 19%. And additional rates are being charged by both sides.
China has increased tariffs by 5 to 10 percent on $ 75 billion worth of US goods as of Sunday, coinciding with rising US tariffs on Chinese consumer goods.
On October 1, US tariffs on $ 250 billion of Chinese products are expected to increase from 25% currently to 30%. And on December 15, tariffs on all remaining imports from China will increase by 15%.
US business groups believe that the upcoming negotiations, if successful, could advance the tariffs that are yet to come into effect and contribute to improving the climate for an agreement.
"We hope the rumors of a calm resolution and de-escalation will be confirmed," said Myron Brilliant, head of international affairs at the US Chamber of Commerce, citing recent calls by Chinese officials for quieter. "In order for the discussions to resume seriously and reach a point where they are serious in nature, we need calmer waters."
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