Beijing has announced tariffs on 128 products including a 25 percent tariff on pork products and a 15 percent tariff on agricultural products including fruit, nuts, and wine. CGTN’s Nathan King reports it is the start of a trade war.
Pork, nuts, fruit, and wine – in total about $3 billion worth of tariffs announced by Beijing-in response to U.S. steel and aluminum tariffs. It’s a calibrated response – not yet a trade war – but China isn’t backing down either.
“I have to say that what was announced by our spokesperson of the Ministry of Commerce was a response to the U.S. 232 investigation, not the 301, which is not announced yet,” said Cui Tiankai, China’s Ambassador to the United States. “But if they do, we will certainly take countermeasures of the same proportion and the same scale, same intensity.”
Cui Tiankai, Chinese Ambassador to the U.S. comments on the Sino-U.S. trade conflict and Chinese countermeasures to U.S. tariffs.
While these tariffs are significant, China is, for now, largely holding back on imposing tariffs on key U.S. exports to China like soybeans, which is now a $14-billion a year market. Beijing’s reaction will depend on another set of China-specific tariffs the U.S. is preparing, which could be announced this week.
“I think the scope of tariffs is still limited,” Huo Jianguo, vice chairman of the China Society for World Trade Organization Studies said. “It fails to touch the main nerves of America, as most of the items are agricultural products from small-scale production. In fact, China imports nearly one-third of its soybeans. If China levies tariffs on imports of soybeans that would give much pressure to the US government and may affect the Republicans’ mid-term election.”
There are direct talks about a solution. U.S. Treasury Secretary Steve Mnuchin is reportedly in contact with China’s top economics official Liu He. But Trump said he wants $100-billion slashed from the U.S.-China trade deficit. Imposing punitive tariffs on China over the trade imbalance and forced transfers of intellectual property from U.S. companies could be just the beginning.
As well as more U.S. tariffs expected to be announced this week, the White House is also considering deep restrictions on Chinese investment in the U.S. – sectors from semiconductors, cell phones, artificial intelligence and beyond could be restricted or closed. Today this may be a trade dispute but it could become a battle for the industries of tomorrow.
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Fears of a trade war are intensifying with the Chinese imposition of tariffs on 128 U.S. products. The measures follow American tariffs on steel and aluminum announced in March. Ravi Ramamurti, director of the Center for Emerging Markets at Northeastern University, discusses the implications with CGTN’s Mike Walter.