BOFIT Viikkokatsaus / BOFIT Weekly 2019/34
On August 13, the US announced it would delay until December 15 the 10 % tariff hike on some of the nearly 300 billion dollars in goods that would otherwise have gone into force on September 1. The deferral applies to over 500 products (e.g. smart phones, chemical products, clothing and footwear) that represent some 155 billion dollars in imports annually. President Donald Trump said the delay was needed to protect retailers and consumers in the upcoming Christmas shopping season.
Even so, the US will go ahead at the beginning of September with the earlier-announced additional 10 % tariff on Chinese imports worth about 130 billion dollars a year. From the beginning of June, about 250 billion dollars in Chinese goods have been subject to punitive 25 % tariffs. After the December hike goes into effect, essentially all Chinese goods imported to the US will be subject to punitive tariffs.
American firms were also granted a 90-day extension this week to supply equipment and software updates to Chinese telecom giant Huawei. The countries will continue to talk by phone before the tariff hikes kicks in next month. While a fact-to-face meeting is set for September, few observers hold out hope that the two sides will resolve their differences.