BEIJING: Trade tensions between the world’s two leading economies are set to escalate on Monday (Mar 10), as Beijing begins levying tariffs on certain US agricultural goods in retaliation for President Donald Trump’s latest hike on Chinese imports.
Since retaking office in January, Trump has unleashed a barrage of tariffs on major US trading partners, including China, Canada and Mexico, citing their failure to stop illegal immigration and flows of deadly fentanyl.
After imposing a blanket 10 percent tariff on all Chinese goods in early February, Trump hiked the rate to 20 per cent last week.
Beijing reacted quickly, its finance ministry accusing Washington of “undermining” the multilateral trading system and announcing fresh measures of its own.
The moves will see fresh tariffs of 10 per cent and 15 per cent imposed on several US farm products, starting on Monday.
Chicken, wheat, corn and cotton from the United States will now be subject to the higher charge while soybeans, sorghum, pork, beef, aquatic products, fruit, vegetables and dairy will face the slightly lower rate.
Analysts say Beijing’s retaliatory tariffs are designed to hurt Trump’s voter base while remaining restrained enough to allow room to hash out a trade deal.
The increasing trade headwinds add to difficulties faced by Chinese leaders currently seeking to stabilise the country’s wavering economy.
Sluggish consumer spending, a prolonged debt crisis in the vast property sector and high youth unemployment are among the issues now facing policymakers.
China’s exports – which last year reached record highs – might not provide the same economic lifeline for Beijing as its trade war with Washington intensifies.
