22:16 GMT +321 September 2019
Listen Live
    The People's Republic of China flag and the U.S. Stars and Stripes fly along Pennsylvania Avenue near the US Capitol during Chinese President Hu Jintao's state visit in Washington, DC, US on January 18, 2011.

    Import Tax of 45% Would Decimate Chinese Exports to US

    © REUTERS / Hyungwon Kang
    US
    Get short URL
    353112
    Subscribe

    If US President Donald Trump makes good on his promise to impose a 45 percent tax on imports from China, Chinese exports to the United States would drop by a hefty 39.1 percent, South Korea’s Yonhap News wrote, citing a report released on Monday by Hyundai Research Institute (HRI).

    According to the report, titled “Trumponomics and its Impact on Chinese Economy,” an increase of just one percent in the cost of Chinese exports would lead to a 0.93 percent drop in the country’s exports.

    So, if US import tax on Chinese goods is set at 15 percent, Chinese exports to the United States  would  shrink by almost $43 billion – an 11.2 percent drop from the 2012-2015 figure.

    The current average US tariff on imports from China is less than 3 percent.

    If the US import tariffs are set at 30 percent, Chinese exports to the US would be down by 25.1 percent ($96.6 billion), and a 45 percent tariff would cost China $149 billion.

    America’s desire to raise import tariffs on Chinese goods stems from the glaring disproportions in the two countries’ trade balance. Since 2007,

    China has been the world’s’ biggest exporter to the United States, selling about $482 billion in goods to the United States in 2015, more than any other country exported to the US.

    In the period between 2000 and 2015, China’s trade surplus with the US rose from $29.8 billion to $266 billion. Simultaneously, the valued added by the sales of Chinese goods in the US went up from $17.8 billion in 2000 to $97.9 billion in 2011.

    To stem the tide of Chinese imports, the US has been erecting protectionist barriers. While between 2012 and 2014 the US used anti-dumping measures against China an average five times a year, in 2015 this number was already 12 in 2015, and 8 in 2016.

    If, in addition to this, the US raises its import tariffs for Chinese goods, this would come as a further blow to Chinese exports, slow down China’s GDP growth rate and would also negatively impact South Korea.

    According to HRI experts, South Korean enterprises working in China would have to reroute some of their exports to Southeast Asia, Latin America and other parts of the globe.

    Those who find it hard to relocate their production facilities elsewhere, will have to look for new opportunities implementing mid- and long-term development plans promoted by Beijing.

    Never miss a story again — sign up to our Telegram channel and we'll keep you up to speed!

    Related:

    US Commerce Secretary Nominee Vows to Eliminate China's Unfair Trade Tariffs
    Trump: US Should Impose Tariffs on China If It Keeps Currency Undervalued
    Tags:
    Chinese goods, import tax, hike, trade surplus, Hyundai Research Institute (HRI), Donald Trump, United States
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik