BOFIT Viikkokatsaus / BOFIT Weekly Review 2018/25

Last Friday (June 15), the United States released a list of 818 Chinese products to be slapped with a 25 % punitive import duty. Imports of affected products amount to about 34 billion dollars a year. The duties are scheduled to take effect on July 6. Following the public hearings process, the list could be expanded by another 284 products (16 billion dollars in imports annually). The duties target China's strategically important sectors such as information technology, industrial robotics and aerospace.

Immediately after the US announced the latest round of imports tariffs, China countered with its own 25 % import duties on US goods worth 34 billion dollars a year. Duties on China's 545-product list, including agricultural products, automobiles and seafood, would also go into effect on July 6. Another 16 billion dollars of additions to the list are planned, including imports of US coal, crude oil, and chemicals.

After promising to make good on its earlier threats to respond if China countered to new sanctions, president Donald Trump said on Monday (June 18) that he would hit China with a new round of 10 % duties on Chinese imports worth roughly 200 billion dollars a year. These duties take effect if China refuses to amend its practices in such areas as intellectual property protection and actually goes through with its threatened 25 % import duties. Trump's Monday evening threat on import duties on Chinese imports could add yet another 200 billion dollars in imports affected, amounting to nearly the entire value of China's goods exports to the US. China's goods exports to the US last year totalled about 500 billion dollars and goods imports 130 billion dollars.

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