The White House has clarified that Donald Trump’s tariffs on China are actually 145 percent, not the 125 percent previously thought.
Trump had whacked a series of escalating tariffs onto China to the point that they reached 125 percent, but CNBC has reported that a White House clarification said this figure was on top of a previous 20 percent of tariffs to make the measures even more punishing.
While Trump recently U-turned on his tariff decisions for most of the countries and knocked them down to the basic 10 percent rate he’d put everyone on, China was excluded from this.
Unpicking the ‘Liberation Day’ tariffs for most countries has gone ahead, and there will now be a 90-day pause in the financial chaos, but China retaliated to Trump’s tariffs with tariffs of their own and the tit-for-tat has escalated.
Initially, he imposed 34 percent tariffs, but these stacked with previous 20 percent tariffs that Trump had already imposed on China so the real total was 54 percent.
China announced their own 34 percent retaliation, prompting the US to threaten another 50 percent and whack their punishment up to 104 percent.
The response from China was to escalate to 84 percent, with the US then responding by going to 125 percent and that’s where it was thought things were.
However, according to CNBC that figure didn’t factor in the initial 20 percent that Trump had announced much earlier for fentanyl-related reasons.
So now we’re in a place where the US is charging 145 percent tariffs on imports from China.
That extra 20 percent the White House wanted everyone to know they’d forgotten to add on comes from something earlier in Trump’s second term where he declared he was going to be ‘stopping poisonous fentanyl and other drugs from flowing into our country’.
The US imposed tariffs on Canada, Mexico, and China, with the White House saying: “Chinese officials have failed to take the actions necessary to stem the flow of precursor chemicals to known criminal cartels and shut down money laundering by transnational criminal organizations.”
So, that’s where this 20 percent has come from. Another 34 percent is the ‘Liberation Day’ stuff, and the other 91 percent is because China fought back over this.
Gosh, this is hard to keep track of; by the time you’ve read this, there’s every chance it’ll have changed again.
What this means in practical terms is that anyone in the US importing something from China will have to pay the US government 145 percent the value of it (so more than the thing is worth) to get it there.
They’ll want to make up those costs elsewhere, so that’ll be passed onto the American consumer or they’ll look somewhere other than China to buy things.
Last yea,r China sold about $438.9 billion worth of goods to the US and is one of their top three main trading partners. In the current circumstances, Americans will be paying more than that to their own government just to buy things that were made in China.
Do you know how many things are made in China? It’s quite a lot, I can tell you.