According to CNBC, China will raise tariffs on $60 billion in U.S. goods in retaliation for the U.S. decision to hike duties on $200 billion worth of Chinese goods, the Chinese Finance Ministry said May 13. Beijing will increase tariffs on more than 5,000 products to as high as 25%. Duties on some other goods will increase to 20%. Those rates will rise from either 10% or 5% previously.
The move follows U.S. President Donald Trump’s decision to raise duties on $200 billion in Chinese products to 25% from 10%. The world’s two largest economies have struggled to sign a trade deal and end a widening conflict that threatens to damage the global economy.
The duties in large part target U.S. farmers, who have suffered from previous shots in the Trump administration’s trade war with China. The thousands of products include peanuts, sugar, wheat, chicken, and turkey.
"This escalation in the trade war will make things even more difficult for farmers and ranchers who are already struggling due to a tough farm economy, weather disasters, trade uncertainty, labor shortages, and other pressures,"" wrote Zippy Duvall, president of the American Farm Bureau Federation, in a statement on the organization's website. "It is especially painful because of recent hope that the United States and China were close to agreeing on a deal to resolve the trade dispute. This new round of tariffs seems to throw cold water on those hopes—but as long as the two sides keep talking, there is the chance of an agreement."
In increasing duties on Chinese goods on May 10, the White House said Beijing backed out of major parts of a developing trade agreement. And the United States may not be done retaliating. Trump has threatened to put 25% tariffs on $325 billion in Chinese goods that remain untaxed.
The U.S. exported almost $20 billion in agricultural products to China in 2017, making it the No. 2 export market for U.S. farmers and ranchers. According to Duvall, the Chinese market grew from 2% of total U.S. agriculture exports in 2000 to 16% in 2017. This 87% growth outpaced the 64% growth in U.S. agricultural exports overall—until the trade war began a little over a year ago.
"The American Farm Bureau supports negotiations to level the playing field with China," said Duvall. "The solution, however, is not more tariffs. We need a successful end to the negotiations with China, and it cannot happen soon enough. We have urged the Trump Administration to get the deal done, and to consider the impacts of these trade actions on our farmers and ranchers."