China Imposes New Tariffs on US Goods in Response to Trump
On Monday April 2, China announced to impose new tariffs on imports from the United States, hitting 128 products ranging from pork, meat and fruit to steel pipes, in response to the US tariffs on steel and aluminum that took effect a week ago. Standard & Poor’s 500-stock index soon tumbled 2.23 percent, and markets have entered correction territory.
The recent development in U.S.-China economic relations gives rise to growing fear of a trade war between the world’s two largest economies. On March 8th, the U.S. President Trump signed orders imposing tariffs of 25 percent on steel imports and 10 percent on aluminum imports. The tariff package took effect on March 23rd, to which China is one of the main victims as the U.S. has granted exemptions to a series of American allies from the tariffs including the European Union.
On March 22nd, President Trump signed an executive memorandum to impose tariffs on 60 billion worth of Chinese exports to the United States. Few hours later, Beijing proclaimed its decision to retaliate and impose tariffs on $3 billion worth of US goods in response to the U.S. tariffs on steel and aluminum. The tariff package released on April 2 is the latest update of China’s such a countermeasure.
The tariff package released by China in March was planned to be implemented in two stages: First, a 15 percent tariff on 120 products including fruit and wine, and second, after further assessing the impact of the United States’ tariffs, a 25 percent tariff on eight other products, including pork, an important export goods for farming regions of the U.S. where President Trump has a strong support.
The latest announcement released on April 2 went one step further, saying the tariffs will cover all 128 products.
The 60 billion in tariffs targeting China particularly has not yet triggered retaliation as it is not going to take effect very soon. U.S. Trade Representative Robert Lighthizer said there would be a 60-day public comment period to assess the tariff package.
It is expected that further escalation could take place especially if the 60 billion tariffs against China is applied, especially considering the US and China’s increasingly bellicose rhetoric. Trump described the 60 billion tariff package targeting China as "the first of many," while Beijing responded, citing the old Chinese saying, that "it is impolite not to reciprocate", and promised a "fight to the end."
"We will certainly take countermeasures of the same proportion and of the same scale, same intensity," Cui Tiankai, China's ambassador to the US, said on April 3rd.