China has recently imposed new tariffs on around $22 billion worth of U.S. goods, including key agricultural exports. This move is a direct response to President Donald Trump’s additional 10 percent levy on all Chinese products, intensifying the ongoing trade war between these two major economies.
The new tariffs primarily target U.S. farm products. For example, soybeans—one of the U.S.’s biggest exports to China—now face an extra 10 percent duty, along with pork, beef, and seafood. Other agricultural items like cotton, chicken, and corn are hit with a 15 percent tariff. As a result, most U.S. agricultural exports to China are now less competitive in that market.
According to Nomura, a key finance firm, China’s 10 percent tariff impacts nearly $19 billion of U.S. imports. In total, they’ve added tariffs on 740 different items. Additionally, China has stopped importing U.S. timber, citing concerns about harmful pests, which affected approximately $850 million worth of goods last year.
Ting Lu, the chief economist at Nomura, stated that China’s actions are measured, especially in comparison to the U.S. He also mentioned that any significant effects on U.S. farmers won’t occur immediately, as it would take time for other nations to ramp up their own production of soybeans and similar products.
This recent development follows an earlier round of tariffs in February when China targeted U.S. energy exports and automobiles after Trump’s initial tariffs. Analysts estimated those tariffs affected about $14 billion in U.S. goods.
A Beijing economics professor noted that China’s targeted actions seem to be a strategy to maintain possible negotiations, particularly as they affect agricultural products primarily from states that supported Trump. This strategy appears aimed at applying political pressure on the President.
Trump has acknowledged that these tariffs may create some disruption but encouraged U.S. farmers to focus on selling more products domestically. However, many agricultural experts worry that a protracted trade conflict could echo the previous trade war, which incurred $27 billion in losses for U.S. agriculture. Although farms received government aid of $23 billion to help mitigate these losses, the trade landscape remains precarious.
Prices for U.S. grains have already seen a decline recently, driven by the tariff exchanges with China and similar tensions between the U.S. and Mexico. Over the past weekend, Trump suggested that the economic impact of his administration’s trade policies could even lead to a recession.
Frederic Neumann from HSBC noted that these trade measures not only affect China’s growth but also threaten to increase inflation in the U.S. He highlighted that Americans might face higher prices as a result of these tariffs.
In addition to the tariffs, China has taken further steps against U.S. companies, such as banning Illumina, a biotech firm, from exporting its gene-sequencing equipment. They also placed Calvin Klein’s parent company, PVH Corp, on a trade blacklist, adding to the growing number of restrictions against U.S. defense firms accessing Chinese materials.
Neumann emphasized that the situation is evolving beyond just tariff disputes, indicating a broader strain in the economic relationship between the two countries.
