On April 1, China announced the retaliatory measures it would be taking in response to the recently announced U.S. tariffs by suspending tariff concessions on 128 items of U.S. products. China’s Customs Tariff Commission of the State Council intends to impose a 15 percent tariff on 120 products and a 25 percent tariff on the remaining eight imports. Broadly speaking, the 15 percent rate pertains to fruits and related products whereas the 25 percent rate pertains to pork and other similar imports.
The U.S. exported over $1 billion worth of pork to China in 2017 and was the nation’s top supplier for apples, cherries, walnuts, and almonds. China’s response effects more than $3 billion in U.S. exports.
This action was in response to President Trump’s decision to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum. Additionally, the refusal by the U.S. to negotiate on the issue with China through the World Trade Organization on March 26 was another reason for the retaliatory tariffs.
As the Wall Street Journal reported the following day, the Dow Jones fell 179 points, or 0.7%, the S&P 500 loss 1.2%, and the Nasdaq dropped 1.8% in response to the rising global trade tensions. Shares of manufacturers, specifically, slid after China imposed tariffs on a range of American agricultural goods. Caterpillar lost 1.5% while John Deere lost 1.4%.
This could be just the beginning. More tariffs between the economic giants are possible for the near future. The Trump Administration also announced on March 22 an additional set of tariffs following a Section 301 investigation by the Office of the United States Trade Representative (USTR), which targets $60 billion in Chinese exports that force American tech companies to forfeit intellectual property in order to gain access to the Chinese market. The tariffs, proposed for over 1,300 Chinese products by the USTR, will be a 25 percent Ad Valorem Duty on the imported goods. The report that outlines the 1,300 products is expected to be published by the USTR in the very near future. A fact sheet, provided by the White House, is available here. Naturally, these actions and the uncertainty of what is to come is stoking the fears of many in the American workforce, from farmers to manufacturers, as whispers of an upcoming trade war worry experts and industry leaders in both countries.
Read the full list of 128 U.S. products targeted by China’s retaliatory tariffs.