Markets

US soybean farmers say China tariffs could result in ‘serious damage’

US soybean farmers say China tariffs could result in ‘serious damage’

Some central IL farmers said they are wary about making any big investments in the near future after fears of a trade war with China became reality Friday, with President Donald Trump imposing 25 percent tariffs on $34 billion worth of goods from that country.

The United States will also impose 25 percent tariffs on another $16 billion in Chinese exports later this summer, something Beijing also said will not go unpunished.

Amazon sellers are also wondering how tariffs could impact them.

That could include "a wide range of products as diverse as tool sets, batteries, remote controls, flash drives and thermostats", he said, adding, "a strategy based on unilateral tariffs is the wrong approach, and it has to stop".

Meanwhile, EU Trade Commissioner Cecilia Malmstrom called the escalation of tariffs between the U.S. and China "worrying" and "clearly damaging" to the world economy. It accused the USA of igniting "the biggest trade war in economic history".

On Thursday, Trump showed no signs of backing down from his fight and suggested the possibility of tariffs on nearly $500 billion more of Chinese goods.

Reacting to the tariffs, the Chinese Commerce Ministry said: "The US has ignited the largest trade war in economic history".

The president's tariffs, the PIIE's researchers conclude, are "a prime example of 20th century tools aimed at the knowledge-embodying trade flows of the 21st century".

China's Ministry of Commerce on Friday accused the US of "launching the biggest trade war in economic history" in a statement (link in Chinese).

Many caught in the initial line of fire - US farmers absorbing tariffs on their exports to China, for instance - are fearful.

But if the trade war continues into the spring of 2019, the owners of thousands of smaller farms, many handed down from generation to generation, could face tough decisions, pitting their pocketbooks against the president's policies.




"Trade war concerns have shot up to the top of our concerns for investors", said Isabelle Mateos y Lago, chief multi-asset strategist at BlackRock Investment Institute in London.

White House trade officials insisted the US economy's recent growth enables it to withstand more pain than its rivals if the war escalates further.

And Trump said Thursday that higher tariffs on an additional $16 billion of Chinese goods are coming in the next two weeks, setting up what could be a tariff on $550 billion worth of goods - more than the $506 billion in Chinese imports past year. However, if the other side provokes a trade war by imposing additional tariffs, China will definitely take countermeasures.

Beijing has vowed to respond immediately with an equal amount of tariffs of its own against United States autos, agricultural and other products.

The American tariffs are the result of President Donald Trump's bid to protect USA jobs and stop "unfair transfers of American technology and intellectual property to China".

"You saw with China, $50 billion and another $200 billion frankly is waiting", he said at the rally in Great Falls, Montana, referring to envisaged additional 10 percent tariffs on $200 billion in Chinese imports.

Trade tensions have also been rising ahead of the USA midterm elections in November, when Democrats appear primed to gain seats in the House and possibly a majority.

The absence of an official statement enforcing the tariffs also sowed confusion among nervous commodity traders, adding to choppy futures trading as soymeal and soybean contracts came under heavy selling pressure in tradeing. It comes at a time when the United States dairy industry was already bracing for new tariffs on cheese exported to Mexico.

The US tariffs imposed so far would affect the equivalent of 0.6% of global trade and account for 0.1% of global GDP, according to Morgan Stanley.

China's commerce ministry, in a statement shortly after the USA deadline passed at 0401 GMT on Friday, said it was forced to retaliate, meaning imported U.S. goods including cars, soybeans, and lobsters also faced 25 per cent tariffs. He said even if his U.S. business disappears entirely, he will be fine. The tariffs on the European Union went into force on June 1. White House Press Secretary Sarah Sanders said while Xi's response was encouraging, the Trump administration needs to see "concrete actions from China".