Trump’s Tweets Imposing List 4 Tariffs Suggest He'll Spare No Goods From Final Duties

Since Trump’s tweets referenced that List 4 tariffs would be imposed on $300 billion worth of goods not previously tariffed, it suggested the final list that takes effect will be the same as proposed in mid-May (see 1905140025). Also unclear is the fate of any List 4 exclusion process that USTR Robert Lighthizer told Congress would be installed immediately after any additional tariffs took effect. But observers recall that Lighthizer resisted congressional pressure for months to install a List 3 exclusion process for as long as those tariffs remained at 10 percent -- the same rate being imposed for List 4.

China’s alleged failure to buy “large quantities” of U.S. agricultural products provoked Trump to act, he tweeted. Trump said he also based the decision on Chinese President Xi Jinping’s failure to stop the flow of fentanyl to the U.S., as he promised to do when the two leaders met on the sidelines of the G20 summit in Osaka, Japan, in late June. The timing of Trump's decision seemed puzzling to many, coming only a day after the White House described the latest round of U.S.-China talks this week in Shanghai as "constructive" (see 1907310028). Trump even repeated that word in his Thursday tweets.

It couldn't be determined whether Trump, rightly or wrongly, construed statements a Chinese Foreign Affairs Ministry spokesperson gave overnight Thursday as evidence the Chinese were slow-walking their purchases of U.S. agricultural goods. "Some Chinese companies, including state-owned and private ones, asked American suppliers about the purchasing prices of soybeans, cotton, pork, sorghum and other agricultural products," said the spokesperson. "Some deals were already made based on market conditions. Relevant companies have applied for the removal of additional tariffs on those agricultural products imported from the US. The Tariff Policy Commission of the State Council is reviewing it. This matter will be dealt with following relevant procedures." The White House didn't comment.

“We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!” said Trump, ending his string of tweets.

Smartphones are the largest of many classifications of consumer tech products that would bear the biggest brunt of the List 4 tariffs. CTA previously said the import values of the products on List 4 that would hit its members are “massive” (see 1905140025).

“Retaliatory” tariffs on Chinese goods, whether at 10 percent or 25 percent, “are bad policy,” said CTA President Gary Shapiro. “The Trump administration is again taxing the American people in the form of new tariffs on their favorite technology products.”

Tariffs are taxes paid for by U.S. consumers, “not China’s government,” said Shapiro. “These retaliatory tariffs are not an effective trade policy and may violate U.S. law.” CTA has argued for months that retaliatory tariffs run afoul of the 1974 Trade Act because the president lacks congressional authority to impose them without a new Section 301 investigation into China’s allegedly unfair trade practices.

More than 300 companies and trade groups “came to Washington this summer to plead with the administration to stop tariffs,” said Shapiro of the List 4 hearings in June. More than 600 businesses “of all sizes across the country sent a letter to President Trump opposing tariffs,” he said of the Tariffs Hurt the Heartland campaign. Trump “should stop ignoring America’s job creators and workers and remove tariffs to prevent higher costs to American families and businesses,” said Shapiro.

The tariffs already in place “have cost American consumers, workers, and businesses of all sizes more than $30 billion,” said Information Technology Industry Council CEO Jason Oxman. “This unprecedented tariff hike would exacerbate that harm and serve to move the U.S. and China further from a meaningful resolution. We urge the president and his team to direct their focus on striking a long-term deal without using Americans’ wallets as leverage.”

Imposing the List 4 tariffs “will only inflict greater pain on American businesses, farmers, workers and consumers, and undermine an otherwise strong U.S. economy,” said Myron Brilliant, U.S. Chamber of Commerce executive vice president-international affairs: “We urge the two sides to recommit to achieving progress in the very near term before these new tariffs come into effect, and to remove all remaining tariffs as swiftly as possible.”

The National Retail Federation is “disappointed the administration is doubling-down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment,” said Senior Vice President-Government Relations David French. “The tariffs imposed over the past year haven’t worked, and there’s no evidence another tax increase on American businesses and consumers will yield new results. We urge the administration to bring our allies to the table and find new tools beyond tariffs to achieve better trade relations.”

“Nobody wins in a trade war, and raising tariffs further on American businesses and consumers will only result in slower economic growth, more farm bankruptcies, fewer jobs and higher prices,” said Tariffs Hurt the Heartland spokesperson Jonathan Gold. “These new tariffs will target the products American families buy every day, ranging from shoes and apparel to toys and electronics," said Gold, NRF’s vice president-supply chain and customs policy. “We all agree China is a bad actor, but an unprecedented tax hike on hardworking Americans is not the answer. It’s time for the administration to come up with a real strategy, put a stop to harmful tariffs and finally deliver the trade deal Americans were promised.”

If Trump is hoping the Chinese “will cave in the face of this September 1 threat for new tariffs I expect he will be disappointed,” said Bill Bishop of the Sinocism China newsletter. “This goes against two of China’s core demands -- sincerity and removal of existing tariffs -- and is humiliating once again to its top negotiators.”