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2 R SUNDAY, MAY 12, 2019 | | News A3 By PAUL WISEMAN The Associated Press WASHINGTON— P resident Donald Trump has height- ened tensions with China by escalating his tariffs on $200 billion in Chinese goods from 10% to 25%. As a tool of national policy, tariffs had long been fading into history, a relic of the 19th and early 20th centu- ries that most experts came to see as harmful to all na- tions involved. Yet more than any other modern presi- dent, Trump has embraced tariffs as a punitive tool — against Europe, Canada and other key trading partners but especially against China, the second-largest economy after that of the United States. The Trump administration asserts and many indepen- dent analysts agree that China has deployed predato- ry tactics to try to give Chi- nese companies an edge in such advanced technologies as artificial intelligence, robotics and electric vehi- cles. China’s tactics, the U.S. contends, include hacking into U.S. companies’ com- puters to steal trade secrets, forcing foreign companies to turn over sensitive technolo- gy in exchange for access to China’s markets and unfairly subsidizing Chinese compa- nies. Trump has also com- plained angrily about Ameri- national Trade Commission in the Harmonized Tariff Schedule, which lists U.S. tariffs on everything from dried plantains (1.4 percent) to parachutes (3 percent). Sometimes, the U.S. will impose additional tariffs on imports that it determines are being sold at unfairly low prices or are being supported by foreign government subsi- dies. Trump says China is paying the tariffs, not Americans, right? American businesses and consumers pay. Trump tweeted Friday, “Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind.” But that’s not how import taxes work. They aren’t paid by Chinese companies. They are paid by the U.S. import- er, which can be a large retailer, a wholesaler or a manufacturer. Those compa- nies have to pay the tariffs or the products won’t make it off the docks of a U.S. port. Huge U.S. importers, such as major retail chains, may have the clout to force a Chinese supplier to cut their prices to offset some or all of the tariffs. But studies show that hasn’t made much dif- ference so far. Including the China tariffs and other duties Trump has imposed on items such as steel, American businesses and consumers were paying $3 billion a month in higher import taxes by the end of last year, according to a study in March by econo- mists from the Federal Re- serve Bank of New York, Columbia University and Princeton University. “Tariffs are taxes, paid for by American consumers and businesses, not by China,” said David French, vice presi- dent of government relations at the National Retail Feder- ation. When will prices rise? It could take a fewweeks. The tariffs are being ap- plied to products that were shipped fromChina starting Friday, but not before. It takes about three weeks for a large container ship to reach the United States fromChina, so the first goods to pay the tariff won’t arrive until then. That might allow U.S. and Chinese negotiators to reach a last-minute deal that could allow the U.S. to rescind the tariffs before they really take effect. Still, some companies will use the tariff announcement to start billing retailers right away, French said. Some of those costs could then be passed quickly to consumers. It is worth noting that the most widely purchased prod- ucts that Americans buy from China — clothes, shoes, toys and electronics such as the iPhone — have not yet been hit with extra tariffs. But Trump has threatened to change that if a deal isn’t reached, and said he would place tariffs, if necessary, on the remaining $290 billion or so of Chinese imports. What are tariffs supposed to achieve? Two things: increase gov- ernment revenue, and pro- tect domestic industries from foreign competition. Before the federal income tax was See > TARIFFS, A4 Trump’s tariffs on China: What are they? How do they work? ca’s gaping trade deficit with China for which he blames weak and naive negotiating by previous U.S. administra- tions. Last July, Trump began gradually imposing tariffs on Chinese imports. After Fri- day’s increase, the adminis- tration is now imposing 25% tariffs on $250 billion in Chinese goods. China has counterpunched by taxing $110 billion of American products, focusing on agri- cultural goods, notably soy- beans, in a calculated effort to inflict pain on Trump supporters in the farm belt. A look at what tariffs are and how they work. What are tariffs? Tariffs are a tax on im- ports. They are typically charged as a percentage of the transaction price that a buyer pays a foreign seller. To use a simple example (ignoring real-world mini- mum amounts subject to tariffs): Say a U.S. retailer buys 100 garden umbrellas from China for $5 apiece — $500 total. And suppose the U.S. tariff rate for the um- brellas is 6.5 percent. The retailer would have to pay a $32.50 tariff on the ship- ment, thereby raising the total price from $500 to $532.50. In the United States, tariffs — sometimes also called duties or levies — are collect- ed by Customs and Border Protection agents at 328 ports of entry across the country. Proceeds go to the Treasury. The tariff rates are published by the U.S. Inter- K I N C H E U N G / T H E A S S O C I A T E D P R E S S , F I L E The latest round of China tariff hikes, which went into effect Friday, will hit a range of consumer goods, including bicycles, luggage, furniture and seafood. NATION&WORLD For updates and more in-depth stories: seattletimes.com/nationworld ONE CARD - THREE CASINOS . O N E C A R D F O R A L L . C O M Q C C C A S I N O . 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