BEIJING: China on Tuesday (Mar 4) swiftly retaliated against fresh US tariffs, announcing 10 per cent to 15 per cent hikes to import levies covering a range of American agricultural and food products.
It also placed 25 US firms under export and investment restrictions.
The extra 10 per cent duty US President Donald Trump threatened China with last week entered into force at midnight local time on Tuesday, resulting in a cumulative 20 per cent tariff in response to what the White House considers Chinese inaction over drug flows.
The tariff represents an additional hike to preexisting levies on thousands of Chinese goods.
Beijing will impose an additional 15 per cent tariff on US chicken, wheat, corn and cotton and an extra 10 per cent levy on US soybeans, sorghum, pork, beef, aquatic products, fruits and vegetables and dairy imports from Mar 10, the finance ministry announced in a statement.
“The US’ unilateral tariffs measures seriously violate World Trade Organization rules and undermine the basis for economic and trade cooperation between China and the US,” China’s commerce ministry said in a separate statement.
“China will firmly safeguard its legitimate rights and interests,” the statement added.
Trump’s new 25 per cent tariffs on imports from Mexico and Canada also took effect on Tuesday, launching new trade conflicts with the top three US trading partners.
The tariff actions, which could upend nearly US$2.2 trillion in two-way annual US trade, went live hours after Trump declared that all three countries had failed to do enough to stem the flow of the deadly fentanyl opioid and its precursor chemicals into the US.
Canada and Mexico, which have enjoyed a virtually tariff-free trading relationship with the US for three decades, were poised to immediately retaliate against their longtime ally.
Canadian Prime Minister Justin Trudeau said Ottawa would respond with immediate 25 per cent tariffs on US$20.7 billion worth of US imports, and another US$86.2 billion if Trump’s tariffs were still in place in 21 days. He said previously that Canada would target American beer, wine, bourbon, home appliances and Florida orange juice.
“Tariffs will disrupt an incredibly successful trading relationship,” Trudeau said, adding that they would violate the US-Mexico-Canada free trade agreement signed by Trump during his first term.
Ontario Premier Doug Ford told NBC that he was ready to cut off shipments of nickel and transmission of electricity from his province to the US in retaliation.
Mexican President Claudia Sheinbaum was expected to announce her response during a morning news conference in Mexico City on Tuesday, the country’s economy ministry said.
STACKING CHINA TARIFFS
The extra 10 per cent duty on Chinese goods adds to a 10 per cent tariff imposed by Trump on Feb 4. The cumulative 20 per cent duty also comes on top of tariffs of up to 25 per cent imposed by Trump during his first term on some US$370 billion worth of US imports.
Some of these products saw US tariffs increase sharply under former president Joe Biden last year, including a doubling of duties on Chinese semiconductors to 50 per cent and a quadrupling of tariffs on Chinese electric vehicles to over 100 per cent.
The 20 per cent tariff will apply to several major US consumer electronics imports from China previously untouched by prior duties, including smartphones, laptops, videogame consoles, smartwatches, speakers and Bluetooth devices.
US farmers were hard hit by Trump’s first-term trade wars, which cost them about US$27 billion in lost export sales and conceded share of the Chinese market to Brazil.
PILING ON
Trump has maintained a blistering pace of tariff actions since taking office in January, including fully restoring 25 per cent tariffs on steel and aluminium imports that take effect Mar 12, rescinding prior exemptions.
Trump’s “America First” agenda, aimed at redrawing trade relationships in favour of the US, is expected to be a centrepiece of his Tuesday night address to a joint session of Congress.
Trump on Saturday opened a national security investigation into imports of lumber and wood products that could result in steep tariffs. Canada, already facing 14.5 per cent US tariffs on softwood lumber, would be hit particularly hard.
A week earlier, Trump revived a probe into countries that levy digital services taxes, proposed fees of up to US$1.5 million on every Chinese-built ship entering a US port and launched a tariff investigation into copper imports.
These add to his plans for higher “reciprocal tariffs” to match the levies of other countries and offset their other trade barriers, a move that could hit the European Union hard.
