The Trump administration yesterday added $200 billion worth of tariffs to the $50 billion in trade levies already slated to go into place next month and threatened to add $200 billion more, sending share prices down
The news put the Dow Jone Industrial Average on track for its longest losing streak in 15 months and added to losses posted last week when the first $50 billion round of tariffs was announced. Those levies included medical devices made in the People’s Republic that could put a $5 billion hit on the U.S. medtech industry, imposing an extra 25% duty on Chinese imports with “industrially significant” technologies, according to the office of U.S. Trade Representative Robert Lighthizer.
The newest set of $200 billion tariffs would add a 10% duty to Chinese imports selected by Lighthizer’s office. Another $200 billion in tariffs could be in store if China retaliates against the latest round of U.S. levies.
“This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods. This is unacceptable. Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States,” President Donald Trump said in prepared remarks. “After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced.”
“I support the president’s action. The initial tariffs that the president asked us to put in place were proportionate and responsive to forced technology transfer and intellectual property theft by the Chinese. It is very unfortunate that instead of eliminating these unfair trading practices China said that it intends to impose unjustified tariffs targeting U.S. workers, farmers, ranchers, and businesses. At the president’s direction, USTR is preparing the proposed tariffs to offset China’s action,” Lighthizer added.
Investors around the globe reacted negatively, with the FTSE 100 in London down -0.4% to 7603.85, the European Equity Fund down -1.3% at 9.37 and Japan’s Nikkei 225 off -1.8% to 22,278.48.
In the U.S., the S&P 500 slid -0.7% to 2,754.61, the Dow 30 was off -1.4% to 21649.28 and the NASDAQ index down -0.8% to 7,686.99.
Included in the initial batch of tariffs announced last week were a variety of medical devices and components, including pacemakers; electrocardiographs; ultrasound, MRI, CT and X-ray scanners; patient monitoring equipment; optical and anesthetic instruments; and alpha, beta, gamma and ion-beam radiation equipment.
Medical device industry representatives lobbied against the tariffs, which could affect about $5 billion in U.S. medtech products, according to AdvaMed public affairs EVP Greg Crist.
Industry leaders are “surprised and disappointed,” Crist said.
“It’s also fair to say manufacturers are disappointed because this action threatens to affect the health and well-being of American patients and those around the world,” he said, noting that the $5 billion price tag could move higher if circuit boards and other components are included in the tariffs.