Trump announces tariffs targeting Chinese goods

Aaron Brown
June 18, 2018

In another move that would heighten tensions, the Treasury Department is expected to announce by June 30 restrictions on Chinese companies investing in the U.S.

Beijing immediately said it would retaliate with penalties of the same scale on American goods - and it spelled out details to impose tariffs on 545 US exports, including farm products, autos and seafood.

"The impact of trade conflict between the world's two largest economies will lead to serious consequences for economic growth and job creation and hurt those that are most vulnerable across the globe", Cargill Global Corporate Affairs Vice President Devry Boughner Vorwerk said Friday.

In turn, China's Commerce Ministry issue a quick statement, saying that it would "immediately introduce taxation measures of the same scale and the same strength".

The announcement caps months of sometimes fraught shuttle diplomacy in which Chinese offers to purchase more American goods failed to assuage Trump's grievances over the soaring trade imbalance and Beijing's aggressive industrial development policies.

"There will be a surge in exports from China and from the the date approaches", said John Manners-Bell, CEO of United Kingdom research firm Transport Intelligence.

The U.S.' trade deficit with China was $347 billion in 2016.

"The trade dispute is escalating at a time when doubts about the domestic economic picture are rising", said Mark Williams, Asia Economist at Capital Economics, in a note.

Beijing will impose tariffs on 545 United States items worth $34 billion - including agricultural products, automobiles and seafood - starting on July 6.

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Most are food and other farm goods, hitting Trump's rural supporters hardest. And Beijing is striking back by targeting US soybeans, beef, seafood and other products.

Tariffs on about $34 billion in Chinese imports will go into effect July 6.

China's response was swift, as it announced hours later that it too would be levying retaliatory tariffs on $50 billion worth of United States goods - including soy products and automobiles. However, ten days later, the White House abruptly announced its decision to proceed with the tariffs.

"Prices will likely drop further should the tariffs be imposed", says Bill Shipley, president of the Iowa Soybean Association. China's interest in USA lobster has grown exponentially in recent years, and selling to China has become a major focus of the lobster industry.

Austin Langley, a 26-year-old soybean farmer in Warwick, N.D., about 20 miles south of Devils Lake, says that would be disastrous for his fortunes. The agreement allows Washington to impose an additional $400 million fine or other penalties if ZTE violates the deal.

Trump released a statement on the new tariffs, calling them a retaliation against Chinese intellectual property graft.

The news raised alarms around the ME lobster industry, as China's an emerging market for US lobster, which has gained popularity with the growing middle class. ME lobster was worth more than $430 million (U.S.) at the docks past year, and the industry is a critical piece of the state's economy, history and heritage.

The White House said it would consult on tariffs on the other $16bn of products, and would apply these later.

In response, the Chinese government have promised to retaliate with similar tariffs.

Other reports by Free-Prsite

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