China has introduced retaliatory tariffs on about $22bn of US goods, including agricultural exports, targeting President Donald Trump’s rural base in the latest trade war escalation between the world’s two largest economies.
Beijing’s latest measures, which were announced last week in response to Trump slapping an additional 10 per cent levy on all Chinese products, are aimed primarily at US farm goods.
Soyabeans, one of the largest US exports to China and worth $12bn last year, were hit with an additional 10 per cent duty. Cotton, chicken and corn face added 15 per cent levies.
The vast majority of US agricultural exports to China are now subject to added tariffs that will erode their competitiveness in the Chinese market.
Analysts at Nomura estimated that China’s added 10 per cent tariff covers nearly $19bn of US imports, with $3bn of goods receiving an additional 15 per cent levy.
Beijing last week also suspended imports of all US timber, citing pest concerns. US exporters sent about $850mn worth of logs to China last year.
While Trump has acknowledged that tariffs will cause “a little disturbance”, he told US farmers on social media last week to “start making a lot of agricultural product to be sold INSIDE of the United States”, adding: “Have fun!”
Over the weekend, Trump declined to rule out that his policies could cause a recession in the US.
Experts — as well as US farmers — are beginning to fear that the countries are headed towards a damaging repeat of the US-China trade war during Trump’s first term as president.
His 2018 tariff fight led to $27bn in losses for US agriculture, though farms received as much as $23bn in compensation from the federal government for trade disruptions.