China has responded to the US and applied import tariffs to more than 100 American products US including pork, wine and fruit. This is the reaction to the US decision to set tariffs for steel and aluminium which has raised many concerns about possible development of a trade war. In the same time the United States has also threatened China with new tariffs counting up to tens of billions of dollars for to the misconduct of intellectual property rights.
China announced starting as of Monday, April 2nd, new tariffs are applied for 128 import goods from the US for the amount of three billion dollars as a response to the tariffs applied by the United States in March for the metal import. According to a statement made by Beijing, tariff for eight types of goods imported from the US have been increased by 25%, including processed aluminium and pork, which will affect the United States meat processing industry. China is the world’s largest pork consumer, and last year the US exported pork worth more than a billion dollars to China. The other 120 products are subject to an additional customs fee of 15%, including a variety of fruit and wine.
China’s Ministry of Finance announced on Monday that this step was taken in order to protect China’s interests, it was said that the new tariffs would offset the loss caused by the additional import duties for aluminium and steel imposed by the United States in March. Beijing announced that these actions (performed by US) had seriously harmed China’s interest, also accusing the United States of violation of the World Trade organization rules by setting these tariffs.
At the same time Beijing has temporarily refrained from targeting the most important US goods exported to China, namely soybeans and passenger aircraft, especially Boeing;
However, Beijing hasn’t sanctioned the two biggest American export items in China – soy beans and Boeing aircraft yet.
Donald Trump, the president of the US, signed an order to apply a 25% customs tariff on steel import and a 10% tariff on aluminium import at the beginning of March, stating that the metal industry in the United States would therefore be protected from unfair competition, particularly highlighting China. Last year the US trading deficit with China was 375 billion dollars.
However, Trump’s actions have also raised concerns in other countries, including allies. The US had temporarily raised import tariffs for these metals from Canada, Mexico, South Korea, and the European Union. It had been cancelled after being threatened to be subject of increased tariffs such export goods as denim bourbon. These exceptions are currently only in power till May 1st.
Meanwhile, the United States threatened China with a second round of tariff raising for Chinese imports worth 60 billion dollars, accusing it of intellectual property theft and rights breach over the course of several years.
Washington also threatened to limit the United States investment in China, but more details are not yet known. Beijing, in turn called on the United States to stop the “economic intimidation” and warned that it is prepared to react. Representatives of the White House also called Beijing’s decision as inclination to continue unfair commercial practice which harms the US national security and distorts the global market.
However, experts believe that at least for the time being it is too early to talk about a trade war between the two countries.
“Information has been published on China’s decision to set import tariffs on 120 American goods. It sounds like a lot; However, this is only a small portion of the goods we are exporting to China. In turn, a few weeks ago the fees applied to Chinese goods with a total value of 60 billion euros is only a tenth of the imported. Therefore, I believe that the statements about the trade war are exaggerated,” says Tim Anderson, a „TJM Investments” expert. Stock exchanges have fallen in stock markets after the Chinese decision, but experts advise not to panic. This is most likely caused by the uncertainty about future economic relations between the two countries.