It will be a Black Christmas for U.S. consumers and business firms as the Trump administration on Wednesday made official its additional 5% tariff on $300 billion in Chinese imports. It imposed collection dates for the new duties on Sept. 1 and Dec. 15.
The dismaying news, which Morgan Stanley earlier warned will hurl the U.S. into an economic recession by 2020, led hundreds of U.S. retail, footwear, toy, and technology companies to warn of price hikes and mounting job losses this holiday season. More than 200 U.S. footwear companies urged Trump to dismiss the proposed tariff hike, but to no avail.
The tariff hike proves president Donald Trump was lying when he claimed China called to arrange a new round of trade talks and that he was ready for the talks. It's now almost certain there will be no immediate talks to end Trump's trade war against China.
The official announcement was made by the U.S. Trade Representative's (USTR) office in an official notice. It said collections of a 15% tariff will begin at 0401 GMT (12:01 a.m. EDT) Sunday on a portion of the list covering more $125 billion of targeted exports from China.
The first to be hit with the higher tariffs will be smartwatches, Bluetooth headphones, flat-panel televisions and many types of footwear.
USTR said Customs and Border Protection (CBP) will also start collecting a 15% tariff on Dec. 15 on the remainder of the $300 billion lists. This list includes cellphones, laptop computers, toys, and clothing.
Trump announced the increase to 15% from 10% in a tweet on Aug. 23. In so doing, he escalated his trade war against China after Beijing imposed retaliatory tariffs on $75 billion worth of U.S. goods, including crude oil, earlier on Aug. 23.
USTR will later issue a separate Federal Register notice with details of Trump's planned tariff increase to 30% on $250 billion in goods already hit with a 25% tariff.
"Imposing tariffs in September on the majority of all footwear products from China -- including nearly every type of leather shoe -- will make it impossible for hardworking American individuals and families to escape the harm that comes from these tax increases," said companies that wrote in a letter to Trump arguing against the tariff he just imposed.
More than 160 other business groups, 200 footwear companies, and business groups and hundreds of retailers urged Trump to scrap the proposed tariffs, warning it would force then to increase consumer prices and fire employees. Among these concerned business groups are the National Retail Federation, Retail Industry Leaders Association and Association of Equipment Manufacturers.
U.S. footwear companies on said the added 15% duties on shoes will be in addition to tariffs already averaging 11%. This added tax burden will mean tariffs on some shoes will reach 67%, boosting costs for consumers by $4 billion every year.
