Today sees China’s tariffs begin on around $22 billion of US agricultural exports in retaliation against the new levies meted out by President Trump in recent weeks.
Beijing announced the measures applying to 740 items last week in response to Washington adding an extra 10% tariff on all Chinese products, taking the total levy up to 20%.
China has added a 10% tariff on US soy beans, which last year saw $12 billion of goods sold by US farmers, along with beef, pork and seafood. Combined, these US exports are estimated by Nomura to cover almost $19 billion of goods.
A new 15% levy has also been applied by China to chicken, corn and cotton, worth an estimated $3 billion.
China last week banned US timber imports and last month also targeted US autos and energy exports, estimated to cover close to $15 billion of goods.
China also added 10 US companies to its “untrusted entity list” and 15 firms to an export control list
On Wednesday, the US tariffs go into effect on steel and aluminum imports.
“Hanging over the market remains the threat of extensive ‘reciprocal’ US trade tariffs coming in next month as Washington seeks to level the playing field for trade (and raise some much needed revenue for the domestic agenda),” said economists at ING.
Duncan Wrigley at Pantheon Macroeconomics said: “China’s response has so far been measured and proportional, to avoid further escalation of the trade war.
“But its response targets President Trump’s supporters — that is, agricultural goods producers — aiming to sway US public opinion on the President’s policies.”