At 12:01 a.m. last night higher U.S. tariffs went into effect on $34 billion in Chinese goods. China immediately retaliated with higher tariffs on U.S. exports such as autos and soybeans.
The Trump administration already has tariffs on another $16 billion in Chinese products in the works.
And President Donald Trump has suggested that the United States will slap higher tariffs on all of China’s exports. The figure for being thrown around is for higher tariffs on $500 billion in Chinese goods.
It’s clear to me that there is another round of U.S. tariffs on Chinese goods headed down the pike in retaliation to the Chinese retaliation. (Which is how trade wars work and how they jump out of control.) What isn’t clear is how big the next step will be–it’s unlikely to be the whole $500 in one move–and how fast the Trump administration will proceed.
In the meantime investors and traders are left trying to figure out what goods and companies will get hit by current tariff moves. For example, today’s higher tariffs from China will hit Tesla (TSLA) hard with tariffs on pure-electric vehicles imported into China rising to 40% from the current 15%. U.S. whiskey, such as Jack Daniels, will face a 30% tariff (while alcohol from other countries will see a 5% duty.) U.S. soybeans will see their tariff rise to 28%. (China has reduced the soybean duty for some other nations to zero.)
