OCTOBER 2018 • FOGHORN 33 LEGISLATIVEREPORT as currency manipulation and state- supported manufacturing to promote its exports. President Trump has vowed that China must change its policies and that he will not hesitate to slap tariffs on Chinese products to bring that country to the bargaining table. A trade war between the United States and China is well underway. Having first imposed a tariff of 25 percent on $50 billion of Chinese imports (mostly industrial products) earlier this summer, President Trump “upped the ante” on September 24 by hitting another $200 billion of imports with tariffs. Many consumer products, such as electronics, fall within this new group of imports subject to tariffs. The tariff will be assessed at 10 percent of value at first, but will increase to 25 percent at the end of this year. Approximately half of Chinese imports to the United States are now subject to tariffs. The basis for this round of tariffs is section 301 of the Trade Act of 1974. An investigation taken under the authority of section 301 found that China’s acts, policies, and practices related to tech- nology transfer, intellectual property, and innovation are unreasonable and discriminatory, thereby burdening American companies seeking to do business in the Chinese domestic market. If China does not respond to the American tariffs by ameliorating its policies, the President has threatened that he may act to subject even more Chinese imports valued at $267 million to tariffs. If he takes this additional action, all Chinese products imported to America will be subject to tariffs. China shows no sign of bending to America’s demands. On September 24, it imposed tariffs of either 5 percent or 10 percent on $60 billion of U.S. exports to China. It also signaled that it is exploring non-tariff retaliatory measures. Some observers have concluded that consumers may not soon see the impacts of the added tariffs because the value of the Chinese yuan has decreased relative to that of the dollar, thereby in some portion offsetting the added 10 percent tariffs. Thus, the cost of most imported Chinese products may stay fairly stable, as least until the end of the calendar year, when the tariffs are scheduled to rise from 10 percent to 25 percent. President Trump appears to believe that the U.S. is better positioned than China to withstand the economic pain inflicted by a trade war. He is betting that eventually China will bow to his demands, since that country is far more dependent on exports than is the U.S. In the meantime, however, American consumers and companies, including PVA members, are likely to eventually endure higher prices for any number of products and commodities than originate in China. n IMTRA COLORS 2016 Primary Use Secondary Use Blue Pantone 647 96C 54M 5Y 27K Pantone Cool Gray 7 20C 14M 12Y 40K Pantone Cool Gray 2 5C 3M 5Y 11K Black 0C 0M 0Y 100K Pantone 368 65C 0M 100Y 0K Pantone 629 36C 0M 9Y 0K The Trusted Source for Advanced LED Lighting NAVIGATION LIGHTS • DECK LIGHTING • ENGINE ROOM LIGHTS • SEARCHLIGHTS • CABIN LIGHTING 508.995.7000 LED www.imtra.com