Trump Tariffs Against China Take Effect

  • Trump Tariffs Against China Take Effect

Trump Tariffs Against China Take Effect

Friday's long-expected tariff volley fueled fear that a prolonged and escalating battle would deal a blow to global trade, investment and growth, while also damaging USA farmers who stand to lose revenues and potentially driving up food prices in China.

Speaking to reporters late Thursday en route to a campaign-style rally in Montana, just before tariffs on U$34 billion worth of Chinese imports were set to go into effect, Trump said there are more to come.

President Donald Trump's trade war with China kicked off on Friday, when the United States started applying 25 percent in tariffs on $35 billion worth of Chinese imports and China fired back with taxes on the same amount of USA goods. "We gave so much of this (soybean) products now that the last thing we need is to limit sales".

Thus, the core of the global trading system progressively built up over the past 70 years and the global supply chains and financial system developed over recent decades to facilitate global trade and investment are under threat, along with the still-fragile recovery in the global economy from the financial crisis. If demand drops, jobs will be in jeopardy.

China still has outstanding sales of about 771,000 tons of US soybeans in the 2017-2018 marketing year and 1.39 million tons in the following season, USDA records show.

Certain products are even more imbalanced, for instance the United States charges a 2.5 percent tariff on Chinese cars, while China now maintains a 25 percent tariff on cars from the United States.

The first ever US tariffs aimed just at China will likely rally Trump's voters who agree with his "America First" argument that Beijing hasn't played fair for years, stealing America's intellectual property and undercutting its manufacturers. "The math is simple. You tax soybean exports at 25-percent, and you have serious damage to USA farmers".

Watkins farms about 8,000 acres of corn and soybeans and says these tariffs are going to hurt business.

Soybeans are also the state's second highest earning export behind oil.

Beijing filed its second complaint with the World Trade Organization and is retaliating with tariffs of their own on United States products like soybeans, electric cars and pork.

China will also start collecting a 25 percent levy on $US34b of U.S. goods such as agricultural products and cars.

So you don't think these USA tariffs and Chinese counter tariffs today are here to stay? And we admire the president for trying to make sure that that is corrected.

"You have to put all of this into context", Castaneda said in an email. Soy bean prices fell to almost 10-year lows this week in anticipation of China's response.

How did we get here?

"All that is gone now". And this year, we have had a lot of great opportunities to hedge and sell soybeans at a good price.

Beijing has accused the United States of "firing on the whole world" with the measures, pointing out that most of the Chinese exports under attack are largely made by companies with foreign investment - including from America. The vessel is near the port of Dalian, according to ship-tracking data.

"If momentum is lost it will be hard to regain". The Trump administration is reviewing whether to introduce duties on imported cars and trucks in a bid it says to protect U.S. national security. Farmers, we're price takers, not price makers.

"This will impact growers coast to coast", Grondine said. The dollar and Treasuries edged lower as traders looked ahead to the release of United States jobs data.

The LSU Ag Center expects South America, particularly Brazil, to capture the majority of the market-share of USA soybean exports into China.

Daimler, the carmaker behind Mercedes-Benz, already warned last month that its profits will fall this year.

"We're getting tariffed to death", said Scott Ditter, a dairy farmer in Sheboygan Falls, Wisconsin, referring to Canada's 270 percent duty on American milk. Daimler said those costs won't be completely passed on to customers. And most United States cars sold in China are made at plants located in China, so they're immune to tariffs.

While economists say the consequences of a spat between the world's two largest economies can be contained for now, there are fears that Donald Trump's stance on trade could cause serious damage to the global economy.

Other US industries that were hit with export taxes include meats, fruit and vegetable growers, dairy farmers, tabacco, pet products, and seafood.