HONG KONG – An increasingly vicious trade war between Washington and Beijing took another turn Wednesday when China imposed an additional 50% tariff on US imports and hiked 84% taxes on US imports.
A tert escalation occurred hours later, including the Trump 50%, which was added Monday, after President Donald Trump’s 104% tariffs came into effect on Chinese imports.
Trump’s latest tariff increase is “a mistake in another mistake,” China’s Customs and Customs Commission said in a statement, adding that the two biggest economies in the world “should resolve differences through equal dialogue based on mutual respect.”
The impact of China’s 84% tariffs could be somewhat limited as China imports only about $160 billion a year in US goods compared to the $400 billion worth of goods exported to the US.
“We’re looking forward to seeing you in the world,” said Rick Waters, director of the Singapore-based Carnegie China think tank. “So what they tend to do is move to adjacent areas and move prices accurately.”
Let’s take a look at some of the other measures China is taking.
American produce and poultry
China could significantly increase tariffs on US agricultural products or even stop importing them entirely.
“I think it’s very likely that China will completely suspend agricultural imports from the US,” said Tianchen Xu, a Beijing-based economist of the Economist Intelligence Unit, a financial forecasting service.
“It’s a weapon that targets Trump supporters bases,” he added.
Soybeans crushed to make protein-rich animal feed ingredients and vegetable oils have been at the heart of the US-China trade conflict for some time.
US exports of soybeans to China fell 75% after China imposed a 25% tariff retaliation during the first trade war with Beijing in 2018.
The Trump administration has announced $12 billion in grants to farmers to offset the impact and has pledged to step in again if the latest tariffs further hurt the industry.
China announced last week a ban on imports of two US companies, allowing further restrictions on American poultry products.
Hollywood movies
China frequently trades locations with North America for the world’s largest box office revenue, a key market for Hollywood films. China has an annual quota on the number of foreign films that can appear in theaters, but it could potentially ban Hollywood films entirely.
American films have lost popularity in recent years as trade tensions between the US and China have escalated. According to Maoyan, a Chinese movie ticket and data platform, there were no Hollywood films in 2023, in stark contrast to 2012, when seven of the 10 best movies of 2012 were made in the US, when seven of the 10 best movies in China were made in the US.
US Services Sector and Intellectual Property
The US has a massive trade deficit with China in its products, but when it comes to services like finance, consulting, legal, and more, that comes forward.
According to a report from the China Council of State, released Wednesday, US data lists China as the fifth largest export market for its services.
China could target the US services sector, for example, by excluding American companies from the government’s procurement process or limiting cooperation with Chinese companies.
The United States has long accused China of stealing its intellectual property. However, Beijing has its own intellectual property profits and can investigate US companies in China to protect them.
Fentanyl cooperation
China and the US have made progress by halting the international flow of fentanyl precursor components. Some of them occur in China, and are processed into deadly opioids in countries such as Mexico and smuggled into the US.
However, China was able to halt its cooperation in response to Trump’s tariffs.
“Because of humanitarian considerations, China offers the United States various forms of assistance,” the Chinese king said last month. “The United States should not repay goodwill with hostility.”
Waters said that China’s suspension of cooperation with fentanyl would be “counterfect.”
“In the US, it’s just solidifying the narrative that they weaponize drugs against us,” he said.
Janis McKee Freyer contributed.