China and
the US entered into a new stage in their ongoing import tax tit-for-tat on
April 4 when Beijing announced that it would impose a stiff 25% tariff on over
100 US products in retaliation for US President Donald J. Trump‘s decision to
single China out as the main target of his self-declared trade war.
The new
regulatory tax will target soybean and sorghum products, cotton, several types
of wheat, orange juice, chemicals, corn products, whiskey, cigars, tobacco,
beef, lubricants, propane, plastics, cars, and certain types of aircraft.
China’s
Commerce Ministry estimates the tariffs will affect €41 billion worth of
imports from the US.
Soybeans
are the biggest agricultural export to China. The highly lucrative commodity is
mostly used as animal feed and biofuel, of which the US controls 37% of the
global production; 62% of which is exported to China.
By singling
out US soybean production, China has opted to strategically target agricultural
regions controlled by Republicans as part of their response to Trump’s initial
move to heavily tax Chinese products.
Airplanes
tariffs are also expected to politically damage the Trump administration as
Boeing exports one in four of its planes to China. Airbus is expected to move
in to fill the vacuum and gain the market share formally occupied by the US’
aerospace industry.
China is
the world’s largest air travel market the biggest market for aircraft. China’s
Eastern Airlines is Boeing’s fifth biggest customer.
The tariff
on cars is likely to deliver a significant blow to General Motors, which sells
10% of its production to China, while the Ford Motor Company will also be
affected as cars shipped to China account for 4% of its total exports.
Washington
initially listed 1,300 Chinese products to be hit by a 25% tariff. The
isolationist and protectionist ideologues in the Trump administration claim the
move was a coordinated response to the “unfair” intellectual property rights
practices, most prominently, pressure on US companies to share technology.
The
escalation of the trade dispute has shaken stock markets in the EU, UK, US, and
China, while Beijing has opted to refer the US to the World Trade Organization
for violating its rules.
The US has
an 18% share of Chinese exports.
https://www.neweurope.eu/article/trade-war-spirals-beijing-washington-enter-second-round-retaliatory-tariffs/