China isn’t wasting any time striking back at US trade barriers.
Today (April 4) the Chinese government unveiled a list of about $50 billion of US imports it’s threatening to subject to a 25% tariff, just hours after the Trump administration said that it would impose a 25% tariff on 1,300 Chinese products. China’s list includes soybeans, aircrafts, automobiles, and beef, among other things (pdf). The commerce ministry said it would publish a final list and details about the timing of the implementation later.
“As the Chinese saying goes, it is only polite to reciprocate,” said a statement from the Chinese embassy in Washington, DC. The remark alludes to the word recently embraced by the Trump administration and US businesses—”reciprocity.” Trump and his allies want China to treat US companies operating in the country the same way Chinese businesses are treated in the US—or else face restrictions.
Things seem to be heading in a negative direction. China’s move matched in value the list of Chinese goods that the US plans to slap a 25% duty on, which the Trump administration announced Tuesday evening. Those tariffs will take effect after a 60-day commenting period.
For those having trouble keeping all this “reciprocating” straight. Here’s a quick review:
- Mar. 1: Trump reveals plans to slap tariffs of 25% on imported steel and 10% on imported aluminum.
- Mar. 22: The White House announces plans for a tariff of 25% on high-tech Chinese products as punishment for industrial policies that benefit domestic companies and for violating US companies’ intellectual property. The action invokes Section 301, a 1974 law covering bilateral trade—specifically, barriers to US exports (pdf, p.64).
- Mar. 23: US tariffs of 25% on steel and 10% on aluminum from certain countries takes effect. China releases a list of 128 US products worth around $3 billion, to be targeted under tariffs of 15% and 25%, in retaliation against US steel and aluminum tariffs.
- Apr. 2: China’s proposed tariff on 128 goods goes into effect.
- Apr. 3: The US publishes a list of import tariffs on 1,300 categories of Chinese products under the Section 301 action. The items on the list, which includes mostly high-tech industrial, medical, aerospace, communication and transportation products, would face a 25% tariff.
It’s important to put these amounts in perspective. In 2017, the US and China traded $657 billion in goods alone.
That said, the values, and volumes, of products affected by trade restrictions are rapidly adding up. This latest rejoinder from China brings the value of goods affected to around $106 billion.
It’s unclear at what stage tit-for-tat exchanges officially become a trade war. But reciprocation is happening awfully fast. And though Trump may have claimed that trade wars are “good, and easy to win,” a much bigger share of US exports stands to be affected than vice versa.