As the trade war between the United States and China escalates, the concerns of American corporations reliant on Chinese products are deepening. President Donald Trump noted on Oct. 10 (local time) that the total tariff rate imposed on Chinese imports is 145%. However, the actual results are somewhat different. According to information released on the White House website, the effective tariff rate on Chinese products varies by item but is predicted to reach a maximum of 245%.
There are four main types of tariffs in the United States: ▲ base tariff ▲ protectionist tariff ▲ specific item tariff on steel, aluminum, automobiles, etc. ▲ reciprocal tariffs. Additionally, punitive tariffs on China are applied due to the influx of fentanyl.
The base rate tariff has been applied to goods imported from around the world since before the Trump administration's second term began. The rate varies by product but averages 3.4%, with lower rates applied to most products.
In addition to the base rate tariff, the first Trump administration and the Biden administration have implemented protectionist tariffs on certain items ranging from 7.5% to 100%. Meanwhile, on Nov. 12, the Trump administration imposed a specific item tariff of 25% on steel and aluminum, followed by a 25% tariff on imported cars on Dec. 3. Semiconductors are also expected to be included in this.
Finally, on Dec. 2, what Trump stated he would apply globally under the guise of correcting trade imbalances was the reciprocal tariff.
The United States has imposed a 125% reciprocal tariff on China and additionally imposed a punitive 20% tariff due to issues related to the influx of fentanyl, resulting in a total tariff burden of 145%.
◇ The varying specific item tariff rates
However, examining by item, the tariffs imposed on Chinese products could significantly exceed 145%. According to an analysis by The New York Times (NYT) based on White House data, the items with the highest specific item tariff rates are syringes and needles. The previous Biden administration imposed a 100% protectionist tariff on syringes and needles in September of last year to protect American companies and take a tough stance against China. Moreover, the Trump administration imposed a 20% punitive tariff for neglecting the influx of fentanyl, and recently, an additional 125% tariff was imposed as part of the reciprocal tariff, resulting in a total tariff of 245% on syringes and needles, approximately 2.5 times the product price.
The tariff rate on wool sweaters is also relatively high at 168.5%. A basic tariff of 16% and an additional protectionist tariff of 7.5% imposed during the first Trump administration led to a tariff of approximately 24% on wool sweaters imported from China last year, valued at $170 million (about 240.9 billion won). Since the beginning of the Trump administration's second term, the punitive tariff of 20% due to fentanyl and the reciprocal tariff of 125% have been added, raising the total tariff on wool sweaters to 168.5%, approximately seven times the previous amount.
Aluminum outdoor chairs imported from China incur a total tariff of 70%, composed of a base tariff of 0%, a protectionist tariff of 25%, a specific item tariff of 25% on steel and aluminum, and a punitive tariff of 20% due to fentanyl. NYT reported that "the United States imports the raw materials for aluminum and steel from Canada and most other countries, but China supplies many products that contain these components."
Various tariffs are imposed on automobile door hinges. A basic tariff of 2%, a protectionist tariff of 7.5%, a specific item tariff of 12.5% (applying only half of the 25% specific item tariff due to the 50% aluminum content), a specific item tariff of 25% on automobiles and automotive parts, and a punitive tariff of 20% combine to impose a total tariff of 67%. In contrast, children's picture books are classified as "information materials" and are exempt from tariffs, with none applied. The United States imports about $600 million (approximately 852 billion won) worth of children's books annually, 93% of which come from China.
◇ Concerns over increased corporate uncertainty
NYT assessed that American corporations are facing deep uncertainty due to differing tariff application regulations by item and the ongoing changes to trade regulations under the Trump administration. NYT stated, "Not all products are subject to astronomical tariffs," noting that in some cases, specific tariffs may be added to other tariffs, or new tariffs may be canceled.
Richard A. Mojica, a tariff specialist lawyer at the law firm Miller & Chevalier, said, "Corporations are making every effort to reduce tariff exposure, especially those with supply chains related to China. However, their choices are quite limited."
There are also great concerns that tariffs on Chinese products may lead to an increase in prices, as China is the second-largest country exporting goods to the United States. According to a report by The Washington Post (WP) on the 16th, the United States imported approximately $439 billion (about 624 trillion won) worth of products from China last year, including cereal bowls, scissors, smartphones, and shoes.
WP reported that "the Trump administration's tariff policy has caused anxiety and confusion in several U.S. industries, and corporations are struggling to plan." It continued, "Technology companies that have long relied on production of parts and devices in China are waiting to see what the final prices will be for semiconductors, smartphones, and laptops."