Unable to stand the economic pressure created by China’s counter-offensive of suspending the country’s procurement of US agricultural products, president Trump softens a bit by modifying coverage of the 10% tariff and by moving effectivity date to December 2019.
Typical of Donald Trump, he proclaims that the move is his way of making the new 10% tariff irrelevant to Christmas; and not as an acknowledgment that his tariff bullying against China has no effect.
Unlike Beijing’s claim that China can sustain its projected economic growth for 2019, despite yuan devaluation, Trump cannot offer similar assurances to the U.S. farmers who stand to lose its 4th largest buyer of farm products. In fact the yuan devaluation can even backfire and destroy Trump’s vision of collecting billions in additional taxes on Chinese goods that will enter the U.S.
China’s yuan devaluation actually brought down the exchange rate between U.S. and Chinese currencies: USD1 : CNY 7. The devaluation means it will only cost US importers only around USD 1 to buy every CNY 7 worth of Chinese goods. That being the case, the lowered value practically offsets whatever additional tariffs they have to pay on importation of Chinese goods come September 01 and December 01, 2019.
E en if the 10% tariff pushes through, U.S. importers of Chinese goods therefore, will not pay heavy tariffs that they subsequently pass on to retailers, and eventually to consumers.
Splitting of Goods in Deferment of September 01, 2019 10% Tariff to December 15, 2019
In trying to put a brave front, POTUS Trump still intends to impose the 10% tariff by September 01, 2019 but not on all Chinese goods as previously planned.
The September effectivity will be imposed on imported various agricultural products, clothes, footwear, kitchenware and antiques. According to Bloomberg News, the total value of which is around USD110 billion.
An estimated $2 billion worth of China-made products such as bibles and shipping containers will be eliminated from the list of goods subject to the impending 10% tariff imposition.
The bigger lot that includes electronic items like smartphones and laptops as well as children’s toys, which Bloomberg estimated as worth USD160 billion, will be subject to the 10% tariff after December 15, 2019.
Modifications on Trump’s chaotic tariff policies are still subject to the outcome of another round of talks being set up by U.S. negotiators with Chinese trade officials. Although Trump claims that Beijing wants to renegotiate for a better deal, Commerce and Foreign Ministries at Beijing’s end is not responding to faxes seeking confirmation of Trump’s current claim. .