Beijing began to impose tariffs on many of the US agricultural products, China's biggest overseas market, on Monday. This is the latest escalation of the trade war between the two biggest economies in the world.
The Chinese government announced tariffs last week shortly after President Trump raised his fees for the second time since taking office in January. China's tariffs include 15% collection on US products such as chicken, wheat and corn, and 10% on products such as soybeans, pork, beef and fruit.
Beijing said goods already shipped by Monday and imported by April 12 are not subject to new customs duties.
A spokesman for the National People's Congress, China's annual legislative conference, last week said Trump's latest tariffs “disturbed the safety and stability of global industry and supply chains.”
The Chinese government also said 15 US companies are blocking the purchase of Chinese products unless they give special permissions, including manufacturers of drones that will be supplied to the US military. And it said that another 10 US companies are blocking them from doing business in China.
Trump imposed a 10% tariff on almost all imports from China in early February, raising the tariffs last week to 20%. He said the action was intended to partially put pressure on China to reduce the flow of opioid fentanyl to the US.
Trump imposed a 25% tariff on Canada and Mexico last Tuesday, but two days later he suddenly stopped many of those taxes.
He added a 20% tariff on approximately $440 billion worth of Chinese products imported by the US each year. The average US tariffs on affected Chinese goods now reach 39%, up from 3% when Trump began his first term eight years ago. With the exception of China, Canada and Mexico, the US collects an average tariff of around 3% in most countries.
Despite recent escalations in the trade war between Washington and Beijing, both sides may be open to compromise. Last week, the Chinese commerce minister told reporters that he had invited his American counterparts and US trade representatives to the meeting. And last month, Trump said a new trade deal with China was “possible.”
Monday's taxation is not the first time China has responded kindly to Trump's trade actions in recent weeks. After the president imposed a 10% tariff in early February, China said it would place tariffs on natural gas, coal and agricultural machinery purchased from the United States.
However, the US has more goals in the trade war, as Americans buy far more goods than they buy from China from Americans. This made the US relatively easy to become one China after China imposed mutual tariffs on US goods during Trump's first term.
China is also struck by many economic issues, including weak foreign investment and the aftermath of real estate busts.
Still, China has other tools to manage ongoing trade skirmishes. In the past, taxes have been reduced on Chinese companies exporting goods to the US, reducing prices and reducing the impact of US tariffs.
Chinese companies have also moved final gatherings of their products to countries such as Vietnam and Mexico. But Trump has sought to bolster this loophole by threatening Mexico's tariffs.
Chinese companies are also trying to misuse the so-called De Minimis rules when the value is below $800. Trump tried to crack down on the practice, but the crackdown turned out to be complicated to implement, and Trump largely suspended his efforts.
