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World

U.S. Moves Forward With More Tariffs On Chinese Goods

DAVID GREENE, HOST:

The tit-for-tat trade war between the U.S. and China continues today as the Trump administration imposes tariffs on a second wave of $16 billion worth of Chinese goods. China is returning the favor with retaliatory tariffs of its own on U.S. goods. And China also says it plans to file a complaint with the World Trade Organization.

Now the United States Trade Representative is holding public hearings this week about imposing tariffs on a further $200 billion of imports. And Jake Colvin of the National Foreign Trade Council, a business group, testified at the USTR meeting yesterday, and he joins us in our studios. Jake, good morning.

JAKE COLVIN: Good morning, David. Thanks for having me.

GREENE: Thanks for coming in. So President Trump has launched into this tariff battle saying he wants to force China to change its behavior - to trade more fairly. You don't see tariffs as the answer, we should make clear. Why not?

COLVIN: No. I don't think tariffs are the right answer. Tariffs - we have real concerns with China's behavior. But in this case, the cure is worse than the sickness. Tariffs are going to impose costs, even in the short term, on U.S. consumers, on U.S. competitiveness of manufacturers and service providers and on U.S. innovation.

GREENE: So let's talk more about that because this latest round is on $16 billion worth of U.S. goods and then $16 billion worth of goods from China. I don't even have a sense for what those numbers mean in terms of the overall trade between the two countries. What do those numbers mean?

COLVIN: So that's right. We're in the middle of a rapidly escalating trade war. And so the tariffs that go into effect today from the United States on $16 billion worth of Chinese goods are on products including semiconductor and manufacturing equipment, chemicals, railway cars, electronics components. That's a fraction of the more than $400 billion worth of imports that we take in from China.

But what we've been talking about this week and what U.S. - the U.S. government has been seeking input on is the idea that they would put up to 25 percent tariffs on $200 billion worth of Chinese goods. And so that's half of everything that we take in from China.

GREENE: That's a sizable portion of what we take in from China.

COLVIN: That's for sure.

GREENE: As an American consumer, how might I start feeling a significant impact, either with these $16 billion or if we go - you know, if the U.S. goes even further?

COLVIN: So up till now, the United - the Trump administration has attempted to limit the application of tariffs to inputs to manufacturing goods, and so it's really masked the impact on consumers, even though it raises the costs for inputs to American manufacturers and service providers that will ultimately be felt by the consumers.

The challenge is if you're going to impose tariffs on up to $200 billion worth of goods, you can't avoid harm to U.S. consumers. And so if tariffs on this additional $200 billion worth of goods go into effect, consumers will see higher prices on everything from apple juice to car seats and highchairs to bicycles to video game consoles to air conditioners and smart home devices.

GREENE: It's a lot of different kinds of products. One thing I want to just ask you about - you said that the cure is worse than the sickness. If the sickness is China's unfair trade practices, if not tariffs, then what?

COLVIN: So the right approach is to have clearly defined objectives to pressure China through a combination of WTO cases - with cases at the World Trade Organization - and to work with our allies, including Japan and the EU, to pressure China to reform its practices.

GREENE: All right. Jake Colvin of the National Foreign Trade Council, who testified at the USTR meeting yesterday as the trade war between the U.S. and China intensifies. Thanks for explaining this all to us. Really appreciate it.

COLVIN: Thanks, David.

(SOUNDBITE OF KARAVELO'S "SNITCHFOOT") Transcript provided by NPR, Copyright NPR.