China hits back at Trump with fresh retaliatory tariffs on agricultural goods
Trade war between the US and China intensified on Tuesday after Beijing announced up to 15 per cent tariffs on American imports that range from agricultural to food products.
Beijing had vowed to impose countermeasures and reiterated its firm opposition after Mr Trump announced additional 10 per cent levies on Chinese imports over the fentanyl row.
The levies imposed on US products will be implemented from 10 March, the Customs Tariff Commission of the State Council said on Tuesday, shortly after Mr Trump's tariffs took effect.
Beijing will impose a 15 per cent tariff on imported chicken, wheat, corn and cotton, while a 10 per cent tariff will be imposed on sorghum, soybean, pork, beef, aquatic products, fruits, vegetables and dairy products, according to a statement from the government.
China accounted for 17 per cent of American agricultural exports in 2023, according to the US department of agriculture.
Beijing also placed 25 American firms under export and investment restrictions on national security grounds, but refrained from punishing any household names. China appears to have targeted at least 10 firms for selling arms to the self-governed island of Taiwan, which Beijing claims as its own territory.
A spokesperson for the Chinese ministry of commerce earlier in the day had accused the US of disregarding facts and international trade rules, calling it a typical example of "unilateralism and bullying".
The additional 10 per cent tariff on Chinese imports will raise the total levies on select Chinese goods to 45 per cent, according to The Washington Post.
In a statement published on its website, the ministry urged Washington to "respect the rights and interests of other countries" and "immediately withdraw the groundless and self-defeating unilateral tariff measures".
The ministry hoped 'that the US will view and handle trade issues in an objective and rational manner and return to the correct path of resolving differences through good faith dialogue at the earliest possible time".
Charles Wang, the founder of Dragon Pacific Capital Management, warned that the trade war will worsen things for the US, which was already facing challenges on multiple fronts.
"For China, we have reduced trade dependency with the US from 23 per cent to around 13 per cent, so the direct impact is limited. In addition, China's economy is recovering, and the parliamentary meeting will provide more signals for supporting the economy," he added.
Charu Channa, Chief investment strategist at Saxo, told Reuters that while the moves from China may not be particularly bold, there is a reason to believe that China wants to be on the negotiating table with Trump rather than sitting back and absorbing the blows.
Last month, Mr Trump claimed that "drugs are still pouring into our country from Mexico and Canada at very high and unacceptable levels". He also claimed that a "large percentage" of these deadly substances were made in China.
China reiterated that it had one of the world's toughest counternarcotics policies and implementation mechanisms. "However, the US is shifting blame and doubling down on its mistakes by once again imposing tariffs on Chinese exports to the US under the pretext of the fentanyl issue," it said.
On Tuesday, stock markets slumped and bond yields slid in Asia as investors braced for an imminent escalation in a global trade war with the new American tariffs on China, Canada and Mexico.
Mr Trump said 25 per cent tariffs on Canada and Mexico would go into effect on Tuesday, prompting Canada to vow retaliation. Both the Canadian dollar and Mexican peso tumbled, although China's yuan bounced off its lowest level since 13 February in offshore trading.
Asian equities tracked the biggest losses on Wall Street this year from overnight, with the S&P 500 sliding 1.8 per cent and the tech-heavy Nasdaq dropping 2.6 per cent.
Crude oil wallowed near 12-week lows and bitcoin languished around $86,000 after erasing the surge to the cusp of $95,000 that started the week.
Tech stocks suffered particular selling pressure, pushing Japan's Nikkei down 2.2 per cent and Taiwan's benchmark index down 1.3 per cent.
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