Already-high trade tension between the United States and China escalated further yesterday, with the White House issuing an Executive Order, calling for what amounts to a significantly increased tariff on imported goods from China into the United States.
In the Executive Order, President Trump said that in response to the State Council Tariff Commission of the People’s Republic of China planning to levy a 34% tariff on all goods imported into China from the U.S., which will take effect at 12:01 AM ET on April 10, that the U.S. will counter that and increase the 54% tariff it had placed on goods from China into the U.S., by another 50%, increasing the cumulative tariff to 104%.
This follows the White House’s April 2 announcement, which President Trump labeled as “Liberation Day,” in which he rolled out new, or increased, tariffs on nearly 60 U.S. trading partners, ranging from 10%-50%. President Trump said described this measure as a “Declaration of Economic Independence,” noting that for years Americans were forced to sit on the sidelines as other nations got rich and powerful, at the expense of the U.S., and stated that it is now the U.S.’s turn to prosper and use trillions of dollars to reduce taxes and pay down the country’s national debt.
Drivers for the tariff measures previously cited by the White House include addressing U.S. trade imbalances, pushing for increased domestic manufacturing, and stemming the flow of fentanyl across U.S. borders from Canada and Mexio.
The aforementioned 34% tariff action by China was an in-kind response to the White House’s April 2 announcement.
This announcement is the most recent one in a series of tariff actions the White House has made since President Trump was re-elected and began his second term on January 20. Last month, it announced that effective April 3, it would move forward with a 25% tariff on automobiles, with a matching 25% tariff on certain automobile parts imported into the United States, effective on May 3. The primary objective of the tariff is to encourage automakers to manufacture more vehicles in the U.S. and address what the White House calls a critical threat to U.S. national security.
Other previous tariff-related announcements by the White House include:
- 25% tariffs on steel and aluminum products imported into the United States;
- 20% tariffs on imports from China; and
- 25% tariffs on goods from Mexico and Canada, with energy products from Canada at a 10% tariff
As previously reported, the While the White House has been signaling its intent to implement new and increased tariffs, there has been a fair amount of pushback from industry associations.
National Retail Federation Vice President of Government Affairs David French said that more tariffs equal more anxiety and uncertainty for American businesses and consumers.
“While leaders in Washington may not care about higher prices, hardworking American families do,” said French. “Tariffs are a tax paid by the U.S. importer that will be passed along to the end consumer. Tariffs will not be paid by foreign countries or suppliers. Even more so, the immediate implementation of these tariffs is a massive undertaking and requires both advance notice and substantial preparation by the millions of U.S. businesses that will be directly impacted. We encourage President Trump to hold trading partners accountable and restore fairness for American businesses without creating economic uncertainty and higher prices for American families.”
And National Association of Manufacturers President Jay Timmons described the President’s announcement last week as complicated, adding that manufacturers are scrambling to determine the exact implications for their operations.
“The stakes for manufacturers could not be higher,” said Timmons. “Many manufacturers in the United States already operate with thin margins. The high costs of new tariffs threaten investment, jobs, supply chains and, in turn, America’s ability to outcompete other nations and lead as the preeminent manufacturing superpower.”
A recent LM reader survey based on feedback from around 100 logistics and supply chain professionals, found that 91% of respondents are concerned that their logistics operations are currently being impacted by various types of market uncertainty.
By far, tariffs were the top driver for the uncertainty, based on the survey’s findings.
“Tariffs are a wild card and leading to delaying or cancelling our expansion plans,” a respondent stated. “Additionally, inflation seems to be returning and this makes us question cost analytics.”
