On May 10th, the United States officially imposed extra tax on China’s USD200 billion worth of goods, increasing the tax rate from 10% to 25%. As the Harmonized Tariff Schedule of the United States (HTSUS) shows, some vitamins, feed, and corn products are involved.

Harmonized Tariff Schedule of the United States (HTSUS)

China stated clearly that necessary measures have to be taken against the imposition. The Eleventh Round of Sino-US High-level Economic and Trade Consultation was in an on-going process. Hence, the both countries might come up with a solution by mutual cooperation and negotiation.

China has been in a firm position against the increase of tariff

The United States announced the first imposition of tax on China’s export in April last year. Despite a powerful response from China, the United States continued to impose extra tax on goods from China. However, the middle kingdom was resolutely opposed to the action.

At the beginning of May this year, the United States threatened to increase tax on China’s USD200 billion worth of goods with the tax rate from 10% to 25%, which sparked concerns in the world and financial markets. With the hope of the U. S. changing the decision, China still held a point of view that China was open for a win-win negotiation.

On May 10^th, the United States made an official announcement of imposing tax on products imported from China with a growth of tax rate to 25%, against which China was ready to take relevant countermeasures.

China is less dependent on American goods than vice versa

According to the data from customs, the gross Sino-US trade value for the first four months this year is 1.1 trillion RMB with a decrease by 11.2%. Meanwhile, the export to the U.S. declines by 4.8% year-on-year, while the import from the U.S. goes down to 26.8%. As it is shown in the statistics from the Chinese Academy of International Trade and Economic Cooperation (CAITEC), last year the soybean import from the U.S. underwent an obvious drop by 70%.

The rise of tax on China’s USD200 billion worth of goods may have a greater impact on the United States than China.  Evidence shows that the economic and trade frictions between China and the United States have been affecting the U.S. more than China until 2019. Director of Foreign Trade Research Institute at CAITEC revealed that USD200 billion worth of goods takes up a wide range of up to 6,081 items, among which a large quantity of goods are necessary imports from China in the U.S. In other words, it is eventually the consumers in the U.S. that have to suffer from the growth of tax.

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