China hit back at the United States on Wednesday with proposed tariffs on $50 billion worth of American goods, covering a significant amount of products that it buys from the United States. Earlier this week, China proposed tariffs on $3 billion worth of American goods in retaliation for American tariffs on steel imports. Together, the tariffs account for about a third of China’s American imports.
Moving with unusual speed, China’s Ministry of Commerce said on Wednesday it plans to impose 25 percent duties on soybeans. China is the top buyer of U.S. soybeans. New tariffs will make it more costly to import 106 types of American goods into China, including other U.S. agricultural commodities such as wheat, corn, cotton, sorghum, beef, frozen orange juice, tobacco, and even whiskey.
China’s plan to institute new tariffs was announced soon after the Trump administration outlined its own protections on a similar value of Chinese-made aircraft parts, cars and car parts, plastic, aerospace products, televisions, steel and more.
China’s new tariffs cover a significant chunk of what it buys from the Unites State. The proposed tariffs of $50 billion, together with the tariffs on $3 billion worth of products earlier this week, account for about a third of China’s American imports.
The United States imports significantly more from China, tariffs on the same amount of products make up roughly one-ninth of its Chinese imports. This could give the United States more room to identify other Chinese products to target.
The new measures have sparked concern that the dispute could widen further, hurting jobs and growth in both countries. However, the U.S. and China are now indicating they are willing to negotiate on escalating frictions.
“External pressure will only make the Chinese people focused on economic development.” said Zhu Guangyao, vice minister of finance, at a news briefing. “However, China’s attitude is clear,” Zhu said. “We don’t want a trade war because a trade war would hurt the interests of both countries.”
Neither set of tariffs go into effect right away and he exact timing of the Chinese measures is not yet clear. The U.S. is allowing 60 days for public feedback and has not specified when the tariffs would take effect, leaving a window open for talks. The question now appears to be as to whether the two sides will intensify their efforts to punish one another before they sit down to negotiate.
Chinese officials have appealed to the World Trade Organization to resolve the feud. However, both sides risk censure by the WTO, the Trump administration for its tariffs and China for swiftly retaliating without a proper review.
The Chinese and U.S. tariffs still do not impact the majority of trade between the two countries, which is valued at nearly $650 billion a year. However, economists say that the clash could escalate quickly if the two countries fail to find a way to quickly resolve their differences, threatening a commercial relationship that is essential to the world economy.
