Escalating trade dispute hits US shares
CHINA’S response to US tariffs aims to hit the Trump administration right in its natural resources.
The world’s largest commodities consumer said on Friday that it would levy a first round of tariffs on $34 billion (R455.77bn) worth of US agriculture products, as well as cars, starting July 6. Another $16bn in goods, including coal and oil, will be subject to tariffs later.
The escalating dispute sent the prices of everything from soybeans to copper lower and hit the shares of US coal producers while boosting the prospects for alternative suppliers like Brazil.
By focusing on agriculture and energy, the tariffs target rural communities in states that voted for Trump in 2016. Beijing’s announcement came less than 12 hours after the US released its list of $50bn worth of Chinese products subject to tariffs. As recently as May, the Asian nation said it would seek to buy more US agricultural and energy products as part of a tentative trade truce between the two countries.
Farm commodities have been a key battleground in the trade war between the world’s two biggest economies. In
The escalating dispute sent the prices of everything from soybeans to copper lower.
US PRESIDENT President Donald Trump said he was pushing ahead with hefty tariffs on $50 billion (R670.25bn) of Chinese imports on Friday, and the smouldering trade war between the world’s two largest economies showed signs of igniting, as Beijing immediately vowed to respond in kind.
Trump laid out a list of more than 800 strategically important imports from April, China started levying additional taxes on US fruit, nuts, pork and wine in response to Trump tariffs on steel and aluminium. Products affected include soy, maize, wheat, rice, sorghum, beef, pork, poultry, fish, dairy products, nuts and vegetables.
The list covers almost all farm products imported from the US, said Li Qiang, chief analyst with Shanghai JC Intelligence. “Given China’s big trade surplus with the US, it will be more difficult and complicated for China” in the future to retaliate if Washington expands the tariff to cover more products, said Li. The new list includes more agricultural produce, including dairy, alfalfa and seafood, than its initial list published in April .
In 2017, China’s agriculture imports from the US were worth $24.1bn. – Bloomberg