President Asked USTR to Consider Levying 25% Tariff on $200 Billion in Chinese Goods, Up From 10%

The Office of the U.S. Trade Representative has been directed to consider levying a 25 percent tariff on $200 billion worth of Chinese imports, according to senior administration officials who spoke with reporters Aug. 1. Because of the potential change in policy, parties will have an extension on filing requests to appear at the Aug. 20 hearing -- they now have until Aug. 13 -- and the comment period will be extended six days, to Sept. 5. "Obviously no final decision has been made" on the tariff rate, an official said. The USTR previously proposed a 10 percent tariff on the goods (see 1807110050).

The $200 billion list is the third wave of Chinese imports targeted by President Donald Trump. The officials declined to give any guidance on when USTR might make a decision on excluding any products from the list of $16 billion in Chinese goods that is slated to be hit with a 25 percent additional duty. Timing for when the tariffs on the following tranche, the $200 billion worth, would take effect remains unclear, and a senior government official declined to handicap how likely it is that any tariff would be added, saying it is above his level.

Dialogue between the Chinese and Americans is ongoing, but no formal round of negotiations has been scheduled, because it's not yet clear if those discussions would be fruitful, an administration official said. "Rather than taking whatever steps they may be taking to resist" the tariffs, the official said, China should work with the U.S. to move toward more of a market economy approach.

They said the potential increase in tariff levels is not in response to any one Chinese countermeasure, but rather is because the tariffs so far have not led the Chinese to acknowledge they need to change their approach with state-owned enterprises or other market-distorting practices. "We have to keep thinking all the time about whether or not we have the right tools in place to encourage China to change its actions," an administration official said, since their ambitions put the whole U.S. high-tech industry at risk.