It has begun.
After US president Donald Trump moved to launch long-promised punitive measures against $60 billion worth of Chinese goods, Beijing today (March 23) announced plans for retaliatory tariffs on $3 billion of US imports. The list covers 128 products including fruit, pork, and steel pipes, according to a statement from the commerce ministry (link in Chinese).
The ministry said China will impose a 15% tariff on 120 categories of US imports worth nearly $1 billion, which include fruit, wine, ethanol, and steel pipes. A second group of eight product lines worth about $2 billion in value, including pork and recycled aluminum, will face a 25% tariff.
The ministry said the proposal was a response to the Trump administration’s earlier decision to impose tariffs on global imports of steel and aluminum, which take effect today.
The latest measure aims to crack down on what the Trump administration says is China’s theft of American intellectual property and other unfair trade practices, and is the result of an eight-month investigation led by the Office of the US Trade Representative. Specific actions won’t be implemented for at least 45 days. Trump said that the White House is in a “very large negotiation” with Beijing as it aims to cut the annual trade deficit with China by $100 billion.
In its statement, the Chinese commerce ministry called on the White House to resolve the dispute through talks to “avoid damaging the broader picture of Chinese-US cooperation.” The Chinese embassy in Washington, DC took a much tougher stance. “China does not want a trade war with anyone. But China is not afraid of and will not recoil from a trade war,” it said in a statement yesterday (March 22).
Trump has long blamed unfair Chinese trade practices for the ballooning trade deficit with China, which reached a record $375 billion (pdf) last year. Trump’s actions represent a “seismic shift from an era dating back to Nixon and Kissinger, where we had as a government viewed China in terms of economic engagement,” Peter Navarro, one of the White House’s most powerful voices on trade and a longtime China hawk, told reporters yesterday. “That process has failed.”
Even before Trump’s announcement of tariffs against China, industry groups and some lawmakers protested the anti-China tariffs, given concerns that they could lead to rising prices for American consumers and businesses. American agriculture, aircraft, and software could end up among the industries that suffer the most in a US-China trade war. US agricultural exports to China stood at $19.6 billion last year, with soybean shipments accounting for more than a third of the entire US crop, and Chinese state media has floated the idea that US soybean farmers could be an easy target for retaliation.