The proposed U.S. tariffs on an additional $200 billion in Chinese goods would hit the world’s second-largest economy more severely than the previous custom duties did, according to the chief executive of Southeast Asia’s largest bank.
That’s because the latest list of targeted Chinese goods includes a greater number of finished products, which can be replaced by similar ones from other sources, Piyush Gupta, the CEO of Singapore’s DBS Bank, said on Friday.
The Trump administration on Tuesday said it plans to impose 10 percent tariffs on $200 billion in Chinese goods, which include refrigerators, electronics, cotton and auto parts. The tariffs will undergo a two-month review process, with hearings in August.
Those tariffs, if implemented, “might start biting a little bit more in terms of the volume of trade” compared to the levies on $34 billion in Chinese goods that came into effect on July 6, Gupta told CNBC’s Martin Soong at the DBS Asian Insights Conference in Singapore.
Impact from the earlier round of U.S. tariffs on the Chinese economy may be limited as there aren’t many alternatives to those affected goods, he said.
“I think most of these relate to components mostly in the mobile phone and the personal computer supply chain. I think alternate sources of supply are limited,” the CEO said.
“The total impact is probably price increases of magnitude of 5 to 10 percent, my own sense is these will be passed on to the end consumer or perhaps absorbed by the supply chain. I don’t think these will reduce China’s export volume anytime soon. It’ll take at least two to three years for the supply chain to be recreated,” he added.