New Tariffs Suspended While China Trade Negotiations Continue
During an appearance on Fox News Sunday on May 20, Treasury Secretary Steven Mnuchin said that around $150 billion worth of proposed tariffs on Chinese goods pursuant to Section 301 of the Trade Act of 1974 are on hold as the two countries continue trade negotiations to reduce their deficit.
“We’re putting the trade war on hold, so right now we have agreed to put the tariffs on hold while we try to execute the framework. … We have an agreement with China that they’re going to substantially agree to it.”
The “framework” Secretary Mnuchin alluded to is described in the May 19 “Joint Statement of the United States and China Regarding Trade Consultations.” According to the Joint Statement, China will increase its purchase of American goods and services in order to reduce the multi-billion dollar trade imbalance with the United States. The Joint Statement offered no specifics and the President reserves the right to reimpose tariffs against Chinese goods if the two countries can’t agree on specifics to bring down the massive trade deficit with Beijing.
The EU and India Announce Retaliatory Duties Against U.S. Products
Pursuant to Section 232 of the Trade Expansion Act of 1962, the U.S. imposed an additional 25% duty on steel products and an additional 10% on aluminum effective March 23, 2018. Canada, Mexico, and the European Union (EU) are exempt at least until June 1. Both India and the European Union have given the World Trade Organization lists of the U.S. products that could incur high tariffs in retaliation for U.S. tariffs on steel and aluminum.
EU Retaliatory Tariffs
The EU response was to publish the Commission Implementing Regulation (EU) 2018/724 of 16 May 2018, assessing an additional 25% duty on imports of products listed in Annex I of the Regulation on and after June 20, 2018. The EU’s product list includes aluminum and steel, but also encompasses consumer goods from a wider range of U.S. industries, including whiskies, denim trousers, cranberries, and motorcycles.
India Retaliatory Tariffs
India said it was facing additional U.S. tariffs of $31 million on aluminum and $134 million on steel, and listed U.S. exports of soya oil, palmolein and cashew nuts among its potential targets for retaliatory tariffs. India said its tariffs would come into effect by June 21, 2018, unless and until the United States removed its tariffs.
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