Trump expands tariffs on China by another $200 billion, threatens more

By this point, you should all know the drill. Another day, another massive tariff from the Trump administration.

After rumors the past few weeks that the president was considering expanding tariffs to another $267 billion worth of imported goods from China, the administration announced today that it would expand them merely to another $200 billion worth of goods, which has the convenience of being a nice round number.

In a White House statement, the president announced a 10 percent tariff to be implemented by September 24, which will then increase to 25 percent at the start of the new year.

“For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies. We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices,” the statement said.

Furthermore, the president said that any retaliatory action by China would result in immediate tariffs action and an expansion of tariffs to $267 billion worth of Chinese goods. Among the options that Chinese policy circles have been mulling is putting in place an export ban on critical components in U.S. supply chains, which could massively damage the ability of manufacturers and assemblers from building their products.

China’s options for direct retaliation are limited, due to the sheer amount of exports China sends to the United States. China imports less from America than the value of goods included in these tariffs, and can no longer match them dollar-to-dollar.

One major question at the heart of the tariffs is whether they will actually prove effective in making U.S. companies more competitive against their Chinese counterparts. The Wall Street Journal published a deep-dive analysis of that topic, arguing that the tariffs are pushing China to move to more advanced industries faster — in effect encouraging China to be more competitive with the U.S., rather than less.

The U.S. Trade Representative, whose office is in charge of determining precisely what products the tariffs will apply to, provided a final list of products that will be hit by tariffs. Of the thousands originally listed in draft tariffs a few weeks ago, several hundred product categories were removed (which likely moved the final value figure lower).

From a release by the office: “Included among the products removed from the proposed list are certain consumer electronics products such as smart watches and Bluetooth devices; certain chemical inputs for manufactured goods, textiles and agriculture; certain health and safety products such as bicycle helmets, and child safety furniture such as car seats and playpens.”

So if you play in a playpen with an Apple Watch while wearing a bike helmet, you are likely in luck.

U.S. companies have massively expanded their lobbying operations to counter the tariffs in recent months, although those lobbying dollars don’t seem to be translating into a less heated set of policies.