Height Securities: Latest China Tariffs Could Be Enacted As Soon As Late September

The public comment period on $200 billion in proposed tariffs on Chinese goods has closed, and Height Capital Markets expects President Donald Trump to move forward with the new taxes. 

What To Know

Height expects Trump to reiterate his intention to proceed with the next round of China tariffs affecting roughly $200 billion of imports now that the public comment period has concluded. 

“The public comment period, which is closed as of today, will force a delay before the final tariff list is published as the U.S. trade representative works to address the multitude of comments received and potentially makes slight alterations to the initial proposal," Height said in a Thursday note.

"We expect this period of finalization will take at least two weeks, based on prior rounds of tariffs, and see the potential for some items to be removed or dropped to lower tariff rates (down from the current threat of 25 percent to the original tariff rate of 10 percent, for instance)." 

While it's possible to expedite the process, it would be difficult, according to Height, and adding new items to the list would likely generate another comment period and split the existing tariffs.

On Thursday, White House economic adviser Larry Kudlow told Bloomberg that Trump is willing to meet with Chinese leader Xi Jinping if China shows a willingness to compromise. 

Why It’s Important

Tariffs could be used to shift negative attention away from the Trump administration, according to Height.

“Trump's desire to shift media attention away from Bob Woodward's upcoming book and the anonymous New York Times op-ed by a senior administration official will likely prompt Trump to issue aggressive threats today and tomorrow," the firm's analysts said.

"These will drive some headline risk around tariffs, but we think markets are already pricing in a portion of the tariff risk." 

Height does not anticipate a delay in the tariff process.

What’s Next

The process should take less than a month, making it quicker than most tariff rounds, which generally take up to five weeks to finalize and a month to enact, according to Height; assuming everything runs smoothly, Trump should be able to start the tariffs by late September at the earliest. 

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