The office of the United States Trade Representative (USTR) announced in a statement on Tuesday that 279 Chinese items to the tune of $16 billion would face 25 per cent tariffs.
The items to be hit with the new suite of tariffs are oils, tubes and pipes, iron and steel goods, vehicles and locomotive parts, and a range of industrial machinery.
On 6 July, US President Donald Trump’s first set of tariffs – at 25 per cent on $34 billion worth of Chinese goods – came into effect.
Separately, USTR Robert Lighthizer announced on 10 July a different set of tariffs at 10 per cent would be imposed upon $200 billion worth of Chinese imports.
UBS analysts said in a report that the tariffs that have already kicked in would have only a “relatively modest” impact on Australia – but also noted that an all-out trade war would be “far more negative”.
“Overall, we expect little impact on Australia from the current trade escalation scenario and so maintain our long-held GDP forecast of 2.8 per cent for 2018 and 2019.
“If, however, tensions escalated to an all-out trade war, leading to a ~1 per cent slowdown in global growth, it’s unlikely that Australia would escape the second round impacts as they reverberate around the global economy,” the report said.
According to the statement, the new suite of tariffs is set to kick at the end of the month.
“Customs and Border Protection will begin to collect the additional duties on the Chinese imports on August 23,” it said.
“A formal notice of the $16 billion tariff action will be published shortly in the Federal Register.”
However, “interested persons” will be allowed to request the exclusion of certain products from the tariff list.
The escalating trade conflict between China and the US has thus far been a drag on investor sentiment, Chinese equities, emerging markets as well as Australian superannuation returns, various analysts and economists have observed.
