Chinas Tariffs Hit Trumps Voter Base
China said last week that it would levy a first round of tariffs on $34 billion worth of U.S. agriculture products, as well as cars, starting on July 6. Another $16 billion in goods, including coal and oil, will be subject to tariffs later.
By focusing on agriculture and energy, the tariffs target rural communities in states that voted for Trump. Beijing’s announcement came less than 12 hours after the United States released its list of $50 billion worth of Chinese products subject to tariffs. As recently as May, Beijing said it would seek to buy more U.S. agricultural and energy products as part of a tentative trade truce between the two countries.
Farm commodities have been a key battleground in the trade war between the world’s two biggest economies. In April, China started levying additional taxes on American fruit, nuts, pork and wine in response to President Trump’s tariffs on steel and aluminum. Products affected include soybean, corn, wheat, rice, sorghum, beef, pork, poultry, fish, dairy products, nuts and vegetables.
The list covered almost all farm products imported from the U.S., said Li Qiang, chief analyst with Shanghai JC Intelligence. “Given China’s big trade surplus with the U.S., it will be more difficult and complicated for China” in the future to retaliate if Washington expanded the tariff to cover more products, Li said. The new list includes more agricultural produce, including dairy, alfalfa and seafood, than the version published in April.
In 2017, China’s agriculture imports from the U.S. were worth $24.1 billion, People’s Daily reported on May 24, citing customs data. That is about 19 percent of total farm imports worth $125.9 billion, according to data from the Ministry of Agriculture and Rural Affairs.
Trump, in a statement Friday, said any Chinese retaliation would be met with new tariffs. He has already threatened additional tariffs on $100 billion in Chinese imports, but the U.S. hasn’t yet detailed which products would be hit.
“The trade war was started many years ago” by China and others, Trump said. He said the U.S. economy is already humming and “after we do our trade deals, wait ’til you see our numbers.”
Sources: South China Morning Post, Wall Street Journal