China announced Friday it will increase tariffs on $75 billion worth of U.S. agricultural and other goods by 5-10% in retaliation for U.S. plans to hit about $300 billion worth of Chinese exports with new import taxes.
The retaliation, announced by the Chinese Finance Ministry, represents a major escalation in a trade war that the U.S. agriculture sector would generally like to see come to an end. It’s unclear when U.S. and Chinese negotiators will be willing to sit down for new face-to-face talks. Gao Feng, a spokesman for China’s Commerce Ministry, on Thursday refused to say when China would be willing to send a team back to Washington to continue negotiating.
“We are not afraid of fighting a trade war (and) when it is necessary, we will fight back,” Gao said in a press conference that was broadcast and translated by the Chinese government,
China, in this latest retaliation, is taking aim at a wide array of U.S. ag commodities, including higher import taxes on oilseeds, grain, fruit, vegetables, tree nuts, seafood and meat.
U.S. goods such as asparagus, frozen peas, oranges, pears, apricots, walnuts, chestnuts, soybeans, oats, barley and peanuts would all get tariff increases.
U.S. soybean exports to China have fallen sharply since China first levied a 25% tariff on the commodity last year. The new Chinese retaliation would add another 5% on U.S. soybeans. But Davie Stephens, president of the American Soybean Association, says the threat of a prolonged trade war is worse than the higher taxes for farmers.
“The longevity of this situation means worsening circumstances for soy growers who still have unsold product from this past season and new crops in the ground this season – with prospects narrowing even more now for sales with China, a market soy growers have valued, nurtured, and respected for many years,” he said Friday.
The U.S. has exported roughly 10 million tons of soybeans this marketing year, less than a fourth of the 36 million tons that China had purchased by this time of the year, two years ago.
“The U.S. measures have led to a sustained escalation of economic and trade frictions between China and the U.S., greatly harming the interests of China, the United States and other countries, and seriously threatening the multilateral trading system and the principle of free trade,” China’s Finance Ministry said in a Friday statement to explain the retaliation.
The Chinese tariff increases are set to be imposed on Sept. 1 and Dec. 15 in conjunction with new U.S. tariffs.
“Any escalation in the trade dispute with China is a major concern to U.S. pork producers,” says Jim Monroe, a spokesman for the National Pork Producers Council. “China, the largest pork-consuming nation in the world, is seeking reliable sources of pork as it deals with African swine fever. There is no more reliable source than the United States. U.S. pork producers are eager to compete on a level playing field in China and to more fully participate in this unprecedented opportunity. Unfortunately, the current trade dispute prevents us from doing so.”
The Trump administration has already implemented plans for two trade aid packages worth a combined $28 billion to help farmers cope with Chinese and other trade disputes.
“Our support package ensures farmers will not stand alone in facing unjustified retaliatory tariffs while President Trump continues working to solidify better and stronger trade deals around the globe,” USDA Secretary Sonny Perdue said Friday.
Farm groups have expressed gratitude for the help, but continue to stress that an end to trade disputes and new free trade agreements are their priorities.
“Amid farmers’ concern over crop conditions, trade disputes and tariffs, and demand destruction in the ethanol market, this program will not make any farmer whole,” the National Corn Growers Association said in a statement.
This story was updated to add new details and a quote from the American Soybean Association.
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