Trump opens new front in trade war

Reuters | Update:

In this file photo taken on 16 May 2019, José, 27, with his son José Daniel, 6, is searched by US Customs and Border Protection Agent Frank Pino in El Paso, Texas. Photo: AFPUS president Donald Trump said on Thursday he would impose 5 per cent tariffs on all goods imported into the United States from Mexico and raise them every month until they reached 25 per cent unless the Mexican government takes action to stem illegal immigration.

The tariffs open up a new front in Trump's trade wars, which until now have been aimed at procuring better terms of trade for the United States and combat what he calls unfair practices by China, the European Union and others.

Trump has rattled the world trade order with unilateral tariffs, the bulk of them aimed at China and covering $250 billion worth of Chinese goods so far.

US Trade Representative Robert Lighthizer has launched the process to impose tariffs on all remaining imports from China, another $300 billion worth of goods.
US Tariffs On Mexico - 5 per cent on all imported Mexican goods effective from 10 June. To rise 5 per cent per month until reaching 25 per cent in October unless the Mexican government takes actions that satisfy US demands to stem the flow of illegal immigrants across the Mexican border into the United States.

Mexican Tariffs On United States - Mexico has not yet announced if it would retaliate should Trump go ahead with the tariffs. Typically, tariffs are reciprocated. Mexico's president Andrew Manuel Lopez Obrador has ordered his foreign minister to the United States for talks.

US Tariffs On China - 25 per cent tariffs on $50 billion worth of Chinese technology goods including machinery, semiconductors, autos, aircraft parts and intermediate electronics components imposed on 6 July and 23 August as part of "Section 301" probe into China's intellectual property practices. - 25 per cent tariffs on $200 billion worth of Chinese goods including computer modems and routers, printed circuit boards, chemicals, building materials and furniture.

A 10 per cent tariff on these goods was imposed on 24 September 2018 as a response to Chinese retaliation. Trump increased the tariff rate to 25 per cent on 10 May after accusing China of backtracking on earlier commitments in the talks. Trump also on 10 May directed USTR to start a public comment process for imposing 25 per cent tariffs on remaining Chinese imports. This $300 billion category of goods would hit consumer products hard, including cell phones, computers, clothing, toys and other consumer products.

Chinese Tariffs On United States - China on 13 May announced it would increase tariffs on a revised list of 5,140 US products, worth about $60 billion, after Trump's latest move. The additional tariff of 25 per cent will be levied on 2,493 products, including liquefied natural gas, soy oil, peanut oil, petrochemicals, frozen minerals and cosmetics. Other products will see tariffs of 5 per cent-20 per cent - 25 per cent tariffs on $50 billion worth of US goods including soybeans, beef, pork, seafood, vegetables, whiskey, ethanol, imposed on 6 July and 23 August in retaliation for initial rounds of US tariffs. China had suspended a 25 per cent duty on US auto imports during their trade negotiations. Beijing has resumed some purchases of US soybeans but has not formally suspended those tariffs. - Based on 2018 US Census Bureau trade data, China would only have about $10 billion in US imports left to levy in retaliation for any future US tariffs. Retaliation could come in other forms, such as increased regulatory hurdles for US companies doing business in China.

US Global Tariffs - 25 per cent tariffs on imported steel and 10 per cent tariffs on imported aluminium, imposed on 23 March 2018 on national security grounds. Exemptions have been granted to Argentina, Australia, Brazil and South Korea in exchange for quotas. Canada and Mexico were exempted from the tariffs earlier this month.

In response, both countries lifted their retaliatory tariffs on the United States. - 20 per cent to 50 per cent tariffs on imported washing machines, imposed on 22 January 2018 as a "global safeguard" action to protect US producers Whirlpool Corp and GE Appliances, a unit of China's Haier Electronics Group Co Ltd. - 30 per cent tariffs on imported solar panels, imposed on 22 January 2018 as a "global safeguard" action to protect US producers Solar World, based in Germany, and Suniva, owned by China's Shunfeng International Clean Energy Ltd. - Trump is considering tariffs of around 25 per cent on imported cars and auto parts, based on a US Commerce Department study of whether such imports threaten US national security.

He faces a 18 May deadline to act on Commerce's recommendations. - The new US-Mexico-Canada Agreement protects Canadian and Mexican production in the event of such tariffs through a quota system. Trump has pledged not to impose auto tariffs on Japan and the European Union while trade negotiations with those partners are underway.

European Union Tariffs On United States - The European Union on 22 June imposed import duties of 25 per cent on a $2.8 billion range of imports from the United States in retaliation for US tariffs on European steel and aluminium.

Targeted US products include Harley-Davidson motorcycles, bourbon, peanuts, blue jeans, steel and aluminium.

India Tariff Threat - India, the world's biggest buyer of US almonds, has threatened to raise import duties on the nuts by 20 per cent and increase tariffs on a range of other farm products and US iron and steel, in retaliation for US tariffs on Indian steel.

These tariffs have been delayed several times, and are currently scheduled to come into effect on 16 June. - Trump has said that he intends to end preferential trade treatment for India, which would result in US tariffs on up to $5.6 billion of imports from India. This has not happened, but if it does, India is expected to retaliate with tariffs on US goods.

Duelling Tariffs With Turkey - The United States halved tariffs in May to 25 per cent on Turkish steel imports and 10 per cent on aluminium. It had doubled US duty rates on steel and aluminium from Turkey 50 per cent and 20 per cent, respectively, in August 2018 citing national security and currency concerns in an escalating trade spat between the NATO allies. - Turkey said it would cut its tariffs on some US goods in response to the US reduction.

It has tariffs on $1.8 billion worth of US goods, including motor vehicles, alcoholic beverages, rice, structural steel and beauty products. - Trump ended preferential trade treatment for Turkey effective 17 May, a move that imposes tariffs on about $1.66 billion of Turkish imports.

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