Author: Eric James
A primer on how to navigate the changes
In the past few months, phrases like “tariffs on Chinese imports” and “trade war with China” have been floating around in the news. The government levied a 25 percent tariff on over $50 billion of products imported from China.
A tariff is a tax or duty paid on a particular class of imports or exports.
The newly imposed tariffs could increase the cost of doing business for many business owners and consequently lead to rising prices for goods and services in the U.S. Will your wallet be impacted? Read on for a quick primer on recent tariff legislation and steps you can take to mitigate your risk of being negatively impacted.
Recent Developments
In response to allegations of China’s unfair trade practices, the U.S. imposed tariffs on over $50 billion of Chinese products. The tariffs were targeting capital and intermediary products, while consumer products accounted for only about 1 percent of the products hit with tariffs. The main goals of the tariffs are to influence China to rework trade agreements, and to make American companies use far fewer Chinese products in their manufacturing and supply chain processes. This initial wave of tariffs came in two sets.
The first set of tariffs were issued on July 6 as a 25 percent additional tariff on $34 billion of Chinese goods. The focus was to impose the duty on raw materials and intermediary goods used in the manufacturing process. There were about 1,102 categories of products affected, such as aircraft tires, aircraft engines and parts, plows, mowers, some cars and trucks and medical equipment.
The second set of tariffs went into effect on Aug. 23, when the government issued an additional 25 percent tariff on $16 billion of Chinese goods. This round of tariffs effected 279 product lines, and again, left consumer goods mainly untouched. A few of the products affected in this round are lubricating oils, resin, plastic tubes, tractors and industrial chemicals.
