Beijing takes aim at Trump heartland

Farm commodities have been a key battleground in the trade war between the world’s two biggest economies

China’s response to US tariffs aims to hit the Trump administration right in its natural resources.

The world’s largest commodities consumer on Friday said it will levy a first round of tariffs on $34 billion (Dh125 billion) worth of US agriculture products, as well as automobiles, starting July 6. Another $16 billion in goods, including coal and oil, will be subject to tariffs later.

By focusing on agriculture and energy, the tariffs target rural communities in states that voted for Trump in 2016. 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.

■ Agriculture: Products affected include soy, corn, 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 Co Ltd.

In 2017, China’s agriculture imports from US were worth $24.1 billion, the People’s Daily reported on May 24, citing customs data. That’s about 19 per cent of total farm imports worth $125.86 billion, according to Ministry of Agriculture and Rural Affairs data.

■ Coal: The coal tariffs strike at the heart of Trump’s energy agenda. Since he was elected, the president has been trying to make good on a campaign promise to revive America’s coal industry. They also come as US miners have grown increasingly dependent on foreign markets for growth. US coal exports jumped by 61 per cent in 2017 as shipments to Asia more than doubled.

■ Crude: China has been a key recipient of American oil since a 40-year US ban on exports was ended by then-President Barack Obama in 2015. The Asian nation is helping drive a surge in exports from the US — China imported 18.4 million barrels of American crude and oil products in March, making it the third-biggest customer behind Mexico and Canada.

■ Gas: China’s booming demand for natural gas has also made it a key market for US exports of LNG. China is the third-largest buyer of US liquefied natural gas, after Mexico and South Korea.

Record production from America’s shale plays has allowed the US to become a net exporter of the fuel for the first time since the 1950s.

■ Cars: While US automakers import few vehicles into China, the tariffs pose a significant threat to BMW AG and Daimler AG’s American factories that make vehicles both for domestic buyers and export markets.