September 1st is here. That means four more months of the year, the first week of school, and the implementation of new tariffs in the U.S.-Sino trade war. As of midnight EST, the Trump administration implemented fresh tariffs on nearly $110 billion of Chinese imports, and China responded in-kind with tariffs of their own on $75 billion of U.S. goods, to be rolled out in stages, with a heavy focus on U.S. agricultural goods.
The new tariffs encompass items such as clothing and shoes as well as technology, including Apple products. Additional items will be subject to new tariffs on December 15, so U.S.-based holiday shoppers may want to stock up on holiday gifts before the new tariffs hit. According to J.P. Morgan, the newest tariffs are expected to cost the average American household $1,000 a year. The Congressional Budget Office projected in August that by 2020, the tariffs and the trade war as a whole will reduce the level of real U.S. GDP by approximately 0.3 percent and reduce the average real household income in the U.S. by $580.
Industries across the U.S. have denounced the tariffs, and more than 30 percent of U.S. companies have blamed the prior tariffs for disappointing second quarter profits, CNBC reported. President Donald Trump deferred the blame, citing “badly run and weak companies” for their own poor performance in Q2. Industries affected by the tariffs thus far include the steel and aluminum industries, wine, pork, nuts, soybeans, whiskey, seafood, semiconductors, aircraft parts, chemicals, cosmetics, oil, and more.
Though the trade war has been raging for over 18 months, China has spent the time seeking alternatives to U.S. products while Washington has spent the time planning additional punitive actions against China.
According to a public statement by China’s official Xinhua News Agency, the country’s “determination to fight against the U.S. economic warmongering has only grown stronger, and its countermeasures more resolute.” The agency noted that Washington continues to underestimate the strength of the Chinese economy.
The next round of trade negotiations is set to take place in September, but neither the U.S. nor China has shown any weakening of their stance, suggesting that a quick resolution is not likely.