The latest round of tit-for-tat tariffs hits U.S. consumers less although American companies more, an analysis shows.
Consumer goods account for just 1 percent of items on the June 15 lists coming from the Office of the U.S. Trade Representative, down coming from 12 percent on the April 3 list, according to a report coming from the Peterson Institute for International Economics.
The portion of the latest lists set for July 6 implementation also did not include cellphones, personal computers along with also laptops, while televisions, air conditioning along with also aluminum were deleted, UBS economist Tao Wang pointed out in a June 18 report.
Source: Peterson Institute for International Economics.
The revisions follow public pushback along with also come as Republicans try to hold their majority in Congress during November’s midterm elections.
“They actually decided not to go directly [due to] worry about the impact on voters,” said Mary Lovely, economics professor at Syracuse University along with also nonresident senior fellow at the Peterson Institute.
Last Friday, the U.S. along with also subsequently China said a first round of additional 25 percent tariffs, each targeting about $34 billion worth of imports coming from the additional, is actually set to take effect July 6. A second round valued at roughly $16 billion for each country will be implemented at an unspecified date.
The Trump administration is actually trying to reduce the U.S. trade deficit with China along with also improve intellectual property protection, although many analysts say tariffs are not an effective way to solving those issues. The trade dispute escalated This kind of week after President Donald Trump on Monday said he has asked the U.S. trade representative to identify yet another $0 billion worth of Chinese goods for yet another 10 percent in tariffs.
Key Chinese products subject to additional US 25% tariff
Source: US Census, USTR, UBS estimates
Despite some reprieve inside the revised tariff lists, U.S. consumers will likely still feel the effects of higher prices down the road.
The list raises costs for many U.S. companies sourcing components coming from overseas. The proportion of intermediate goods rose to 52 percent coming from 41 percent, the Peterson analysis showed.
Lovely pointed out of which latest list of U.S. tariffs adds more components of which U.S. vehicle companies need.
Key US products subject to additional China 25% tariff (effective July 6)
Source: US Census; China Customs, MOC along with also MOF; UBS estimates. Note: For trade data not available coming from China’s Customs along with also MOC statistics, we use US Census data as references.
The second set of products also covers electronic integrated circuits, machines along with also parts for manufacturing semiconductor devices or electronic ICs, UBS’ Wang noted. “They are products the USTR identified as benefiting coming from China’s industrial policies (e.g. ‘Made in China 2025’),” Wang said.
American farmers still bear the brunt of Beijing’s planned tariffs. Soybeans have remained on both the April along with also June lists, along with wheat along with also corn. The latest announcement also added a slew of seafood, along with also fruit along with also nuts.
The agricultural duties will affect the Chinese people. So will tariffs on motor cars along with also auto parts of which remained on the June list.
although Beijing “stayed far away coming from supply chains. They wanted to signal to the rest of the earth of which they are still a Great place to provide value,” Lovely said.
Notably, China deleted aircraft coming from its latest list. of which’s potentially a boon to Boeing, although the idea still must vie with Airbus for Chinese contracts.