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Trump Hikes Tariffs on Chinese Goods Again, Threatens to Force U.S. Companies Out of China

Tuesday, August 27, 2019
Sandler, Travis & Rosenberg Trade Report

President Trump announced Aug. 23 that he will further increase existing and pending tariffs on imports from China in response to Beijing’s move to raise its own tariffs on more than 5,000 additional goods from the U.S. The president also threatened to force U.S. companies to relocate operations out of China if bilateral trade relations worsen.

According to a statement from the Office of the U.S. Trade Representative, the additional 25 percent tariff currently in place on $250 billion worth of Chinese goods (lists 1 through 3) will be increased to 30 percent “effective October 1 following a notice and comment period.” USTR added that the additional tariff on another approximately $300 billion worth of imports from China, which is scheduled to be imposed in two stages on Sept. 1 (list 4A) and Dec. 15 (list 4B), “will now be 15 percent” instead of 10 percent. A Federal Register notice providing additional details is expected in the near future.

Also on Aug. 23 Trump declared in a Twitter post that “American companies are hereby ordered to immediately start looking for an alternative to China, including bringing ... your companies HOME and making your products in the USA.” In a subsequent post he asserted that the International Emergency Economic Powers Act of 1977 gives him the authority to order U.S. companies to leave China.

However, Trump told reporters at a weekend summit of G-7 leaders in France that he has “no plan right now” to invoke this authority. Instead, a Bloomberg article quoted Treasury Secretary Steve Mnuchin as saying, the president is “ordering companies to start looking, because he wants to make sure to the extent we are in an extended trade war that companies don’t have these issues and move out of China.”

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