(Reuters) – U.S. President Donald Trump on Thursday said he would impose a 10 percent tariff on the remaining $300 billion of Chinese imports as tensions with China spiked again, the latest salvo in a yearlong trade war between the world’s two largest economies.
The levies, due to begin on Sept. 1, would hit a wide range of consumer goods and came the day after trade talks wrapped up in Shanghai, yielding little progress. Trump’s statements on Thursday sent the benchmark S&P 500 lower and crude oil tumbling.
Washington has pressed Beijing for wide-ranging economic reforms, including providing better protection for American intellectual property, ending subsidies that favor Chinese state-owned enterprises, and improving access to China’s markets for U.S. companies.
Trump has imposed tariffs on $250 billion of Chinese imports and is threatening to extend those to cover effectively everything China exports to the United States.
China has retaliated with tariffs on U.S. imports.
Trump has said bad trade deals with China and others have cost millions of American jobs. Below are some of the costs of Trump’s push to rewrite the terms of global trade, with China and other top trade partners:
Tariffs have disrupted international supply lines, roiled global financial markets and encouraged manufacturers to invest in plants outside China.
It is impossible to calculate the precise costs, as many companies do not detail the reasons for changes in their business models or manufacturing locations, nor disclose the financial costs of the trade war.
Fitch Ratings estimates that extending tariffs to cover another $300 billion in Chinese goods would chop 0.4 percent from world economic output.
The International Monetary Fund said last month that global trade in the first quarter of 2019 was the slowest since 2012, noting big downside risks for world growth moving forward.
Trump has said China pays the tariffs he has imposed on Chinese goods, but tariffs are paid by U.S.-registered firms when the products enter the United States. Importers often pass that cost onto consumers in the form of price hikes.
American farmers have been among the hardest hit so far. China is the top market for many of their biggest crops and Beijing hit those crops with retaliatory tariffs. The Chinese tariffs targeted U.S. farmers because they helped vote Trump into power.
The trade war has hurt sales of a wide range of agricultural produce, including fresh fruit, meat and grains. The single biggest agricultural export from the U.S. are soybeans, most of which went to China before the trade war.
To compensate for lost sales to China, the U.S. government has rolled out two rounds of trade aid for farmers, expected to total $28 billion by the time they are done. The U.S. had doled out about $8.6 billion of that as of the end of June.
U.S. soybean exports to all countries fell to about $15 billion in the period from July 2018 to May 2019, down 27 percent from $20.6 billion in the same period a year earlier, the most recent U.S. Department of Agriculture data show. Exports to China alone were down 77 percent at just $2.5 billion, versus $11.2 billion from July to May a year earlier.
Chinese telecommunications giant Huawei warned U.S. restrictions on its business will impact short-term revenue growth, even as its half-year revenue surged. Previously, the company’s founder said the restrictions would cost the company around $30 billion.
Tariffs are costing the U.S. tech sector $1.3 billion a month, the Consumer Technology Association said in a written statement to the United States Trade Representative in June.
Products for 5G mobile technology were hit by $122 million of tariffs in the month of October 2018 alone, surging from just $65,000 a year earlier, the trade group said.
Shares of Apple Inc and chipmakers including Qualcomm Inc, Nvidia Corp and Micron Technology slid after Trump’s vow on Thursday.
Concerns about a slowdown in China, where iPhone sales continue to decline, have helped keep Apple’s share price below last year’s highs. The company said in June Trump’s proposed tariffs would reduce its competitiveness and cut its contribution to the U.S. Treasury.
The U.S. plan for more tariffs would raise the retail price of cellphones by an average of $70, the price of laptop computers by $120 and video game consoles by $56, a representative for the Consumer Technology Association has said.
Trump’s steel and aluminum tariffs have added billions of dollars to the cost of assembling U.S. vehicles, and tariffs on Chinese-made parts have also hiked costs.
General Motors Co, the largest automaker in the U.S., has projected it will incur $1 billion in extra costs for tariffs and raw materials.
Fiat Chrysler Automobiles NV has said it expects dramatically increased costs for commodities due to tariffs, costing the automaker 750 million euros ($832.50 million).
Motorcycle manufacturer Harley-Davidson was hit by retaliatory tariffs from the European Union for the metals tariffs. The company calculates spending $100 million on tariff costs in 2019.
The recreational vehicle industry has also taken a hit. Motor home maker Winnebago Industries Inc said it expected at least $10 million in added cost pressures in fiscal 2020 from the latest tariffs and proposed duties.
Equipment manufacturers Deere & Co and Case New Holland have passed on higher costs from metals tariffs to customers, further lifting farm costs.
In May, Deere said it missed quarterly profit estimates for the fifth straight quarter and cut its full-year outlook, as the escalating U.S.-China trade war threatens to further hit farm incomes and demand for the company’s equipment.
OTHER RISING COSTS
Steel and aluminum tariffs were among the first to be levied by the U.S. in early 2018 and included imports from almost the entire world.
The move benefited U.S. steel producers, but not the manufacturers that process the metal.
The tariff burden on U.S. steel and aluminum buyers was almost $5 billion last year, according to the American Action Forum.