Applied from Friday 10 May, the new tariffs imposed by Washington on Chinese products worth 180 billion euros will mainly affect confidence, observers note.
"In light of the lack of progress in discussions with China, the President has directed the Trade Representative to increase the rate of additional duty [from 10%] to 25%", states a notice issued by the Office of the Trade Representative on May 5. This decision came in response to what Washington described as a Chinese "backtracking" in the negotiations for a trade agreement between the two powers.
This choice "takes into account the extensive public comments and testimony, as well as advice from advisory committees", the notice also states.
These tariffs now account for more than 50% of US-Chinese trade.
The Chinese Ministry of Commerce announced on Wednesday 8 May, that "there is no choice but to react with corrective measures" in response to these new tariff sanctions.
While the Chinese Trade Minister was on his way to Washington for further talks scheduled for Thursday 9 May, U.S. President Donald Trump said via Twitter that he would prefer sanctions to a bad agreement on Wednesday 8 May: "I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers...great for U.S., not good for China!"
What impact?
However, according to several studies conducted across the Atlantic, it is American consumers and operators who are paying the extra costs of these sanctions (see EUROPE 12248/16).
Nevertheless, according to economist Paul Krugman, "a 25% tariff would be a tax increase of roughly 0.5% of GDP. That's much less than Trump's fiscal expansion", he pointed out on May 7 in a tweet.
On the European side, in addition to the risks of trade diversion that could result in an increase in injurious imports for European economic operators, this new escalation in the trade war prolongs the period of uncertainty in which companies are already plunged.
Chad Bown, Senior Fellow at the Peterson Institute for International Economics, points out that many companies are reluctant to engage in investment until they have a better understanding of US policy objectives.
To consult the notice in the Federal Register: https://bit.ly/2WCN7hG. (Original version in French by Hermine Donceel)