USA – The United States has threatened to impose a 25% tariff on products with ‘industrially significant technologies’ from China while the latter has promised retaliatory measures on 100 types US goods including 25% tariff on soybean.
The new measures were announced by US President Donald Trump on June 14 prompting a haste response from China, escalating trade war between the two global nations.
Other US goods that will be affected by the tariffs include cars, alcohol and tobacco, whose worth value was US$50 billion last year, according to Aljazeera.
Earlier this year, China’s Commerce Department announced it would impose tariffs on US goods affecting US$50 billion in imports following Trump’s tariffs on aluminium and steel imports into the US.
A 25% duty on soybeans could be devastating to US soybean growers who have seen a decline in prices as well as farm income.
Last year, US exported US$14 billion worth of the commodity to China, according to the American Soybean Association (ASA).
“Crop prices have dropped 40% in just the last five years, and farm income is down 50% compared to 2013,” said Davie Stephens, a Kentucky soybean grower and ASA vice-president.
“A recent study by Purdue University economists predicts that soybean exports to China could drop by a whopping 65% if China imposes a 25% tariff on U.S. soybeans.
As a soy grower, I depend on trade with China — China imports roughly 60% of total U.S. soybean exports, representing nearly 1 in 3 rows of harvested soybeans.”
Trump said he was considering additional tariffs if China engaged in retaliatory measures, and that the move was vital in terming preventing unfair transfers of American technology and intellectual property to China, basing his argument on unfair trade practices.
“In addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China,” according to a White House statement quoted by World Grain.
After a meeting between Commerce Secretary Wilbur Ross and the Chinese economic adviser Liu He earlier this month, China offered to buy nearly US$70 billion of American goods if US halted the tariffs.
This was preceded by calls from producers encouraging talks between Trump’s administration and China in order to improve market access.
The National Pork Producers Council (NPPC) had indicated that the 25% tariffs on pork products would lead to losses of up to US$2.2 billion annually for the industry.
Grower and industry groups are asking the U.S. Congress to convince the administration to halt tariffs and go back to the negotiating table.
