Trump Announces China Tariffs: What We Know
TL;DR as of Monday, February 3, at 11:00 PM central time: No agreement has been reached between President Trump and President Xi Jinping. Additional 10% tariffs have been added to all Chinese goods. China has responded with the announcement of 15% tariffs on coal and liquefied natural gas products, and 10% tariffs on crude oil, agricultural machinery and large-engine cars from the U.S.
Background: Over the weekend, President Trump signed three executive orders announcing new tariffs on goods from Mexico, Canada, and China. He cited the International Emergency Economic Powers Act (IEEPA) and the National Emergencies act, among others, as grounds for these tariffs to stop the flow of illicit drugs and illegal immigrants into the United States.
Scarbrough will continue to follow the situation and provide updates as they become available.
As of 11:00 PM central time on February 3, here is what we know.
- President Trump and President Xi Jinping have not reached an agreement to delay the tariffs. There is officially an additional 10% tariff in effect on all goods from China until otherwise specified.
- China has responded with 15% tariffs on coal and liquefied natural gas products, and 10% tariffs on crude oil, agricultural machinery and large-engine cars.
- The Chinese tariffs go into effect Monday, February 10.
As of 3:00 PM central time on February 3, here is what we currently know about the China tariffs.
- President Trump has said he will meet with China within the next 24 hours to discuss the potential tariffs.
- China’s ambassador to the United Nations said China will file a complaint with the World Trade Organization and could consider retaliatory action against the U.S.
- A Federal Register notice was filed and is scheduled to be published on February 5.
As of Saturday, February 1, here is what we know:
- President Trump signed the executive order announcing these tariffs would go into effect at 12:01 AM eastern time on February 4, and there is no exclusion process for companies to avoid the additional tariffs.
- Each executive order also includes a clause stating any retaliatory action by the affected country could result in an increase in the scope of the tariffs imposed against them.
- The tariffs would be an additional 10% on top of existing tariffs.
As of Friday, January 31 at 4:00 PM central time, this is what we know:
- There has been no communication to the trade from the United States Trade Representative (USTR) in the form of a federal register notice clearly stating the reasoning, scope, and timeframe of such an action.
- CBP has been unable to comment on how they would collect new tariffs due to a lack of official guidance.
- ABI software providers haven’t been provided with any notice to program their systems for the trade community.
- Previous additional tariffs (i.e., Section 301 or Section 232) have both had public comment periods and implementation timeframes that spanned months rather than days.
What we don’t know:
- We aren’t aware of any specific legal framework that would allow President Trump to bypass these mechanisms to impose new tariffs.
- We don’t know if a good that qualifies for USMCA treatment today would be subject to the additional duties.
If you are a Scarbrough (or Parker & Co.) client, you will receive information from a Scarbrough representative regarding how these potential tariffs may add to your existing duty payments if they go into place.