China threatens tariffs in response to U.S. action

26.03.2018

China has already threatened retaliatory action following the March 22 announcement by U.S. President Trump to impose $60 billion worth of annual tariffs on Chinese imports, but the initial threats do not include agriculture commodities such as corn, wheat and soybeans.

The Chinese Ministry of Commerce issued the statement online within hours of Trump’s announcement. It covers seven categories and 128 products totaling $3 billion in U.S. exports to China. The list includes wine, fruits and nuts, seamless steel pipes and pork.

Soybeans and electronics are not on the list, causing some to speculate that there could be additional lists of tariffs yet to come from China.

U.S. agriculture organizations fear retaliation from China, which they said would complicate global efforts to promote sales of U.S. grains and grain products.

“Since 2010, we have been adversely impacted by trade policy actions by China against U.S. distiller’s dried grains with solubles (DDGS), sorghum, ethanol and corn,” said Tom Sleight, U.S. Grains Council (USGC) president and chief executive officer. “We have supported targeted, U.S. government efforts to address these issues but nevertheless remained dedicated to the China market because it holds immense growth potential for U.S. agriculture. In the near term, we will continue our work to diversify the markets to which our products are exported, focused on sales that can support prices this crop year. Based on our recent experience, we are well aware this work will be an uphill battle because our reputation as a reliable supplier has come into question.”

Wheat groups said Chinese retaliation could include road blocks to U.S. soybeans, wheat and corn, which would cut into already unsustainable farm incomes.

Trump said the tariffs are in response to China stealing American technology and trade secrets, robbing companies of jobs and billions of dollars in revenue.

While they agree Chinese policies create unnecessary trade distortions for U.S. farmers, wheat groups said they support challenges within the World Trade Organization.

“Such cases served notice to China and our trading partners that the United States would lead a legitimate effort to enforce existing trade rules — by following those rules,” said U.S. Wheat Associates and the National Association of Wheat Growers. “We believe that it is in the nation’s best interests, and the interests of the wheat farmers we represent, to challenge trade distorting policies to the maximum extent possible within WTO rules.”

USGC said U.S. agriculture needs a stable and coherent trade policy to thrive.

“The world is watching what our country does next — and markets have long memories,” Sleight said. “Agriculture is a positive contributor to the balance of trade, and the international marketplace offers the best available opportunity for growth in the U.S. agriculture sector and the U.S. economy as a whole.”

The U.S. tariffs, which will publish within 15 days, will target 1,300 lines of Chinese goods, from shoes and clothing to electronics, administration officials said.


world-grain

Readers choice: TOP-5 articles of the month by UkrAgroConsult