BEIJING -China responded to President Donald Trump’s latest trade move by announcing tariffs on 106 U.S. products, including soybeans, airplanes and cars, in the latest escalation of what risks becoming a tit-for-tat trade war between the world’s two largest economies.
The plan, which was announced Wednesday, would see China slap 25 percent levies on a range of U.S. goods worth about $50 billion dollars. Though China said the timing depends on U.S. moves, the news had an immediate impact on markets, including the soybean market.
Soybeans on the Chicago Board of Trade immediately dropped as much as 4.2 percent, while wheat and corn futures also slid, Bloomberg reported.
The announcement came just a day after the White House unveiled plans for tariffs on $50 billion in Chinese imports across 1,300 categories, targeting 25 percent levies on Chinese goods ranging from electronics, aerospace and machinery to phones, shoes and furniture.
Though a Chinese response was widely expected, the speed of the announcement came as a surprise, deepening fears of a rapid escalation.
At a news conference on Wednesday, Chinese officials did little to stem talk of “war,” but stressed that Beijing is willing to work with the White House.
“If someone wants a trade war, we will fight to the end. If someone wants to talk, our door is open,” said Wang Shouwen, vice-minister of commerce.
Zhu Guangyao, vice-minister of finance said both sides were “showing their swords and making demands,” but needed to get back to the negotiating table.
Though the dollar amounts targeted by both sides are similar — $50 billion — the focus on U.S. soybean exports by China could have a particularly severe impact on the United States.
Soybeans are the top U.S. agricultural export to China and U.S. soybean farmers and their allies fought hard to prevent the tariffs — something Zhu noted in the news conference.
Christopher Balding, an associate professor at the HSBC Business School in Shenzhen, said that comparing the U.S. and Chinese lists showed China’s willingness to target products like soybeans, automobiles and planes that could create political problems for President Donald Trump.
“Even though the numbers between China and the U.S. are comparable, it seems clear that China is trying to twist the knife,” he said, “This is a warning that ‘we are willing to fight harder and inflict more pain that you are.’”
The U.S. Ambassador to China, Terry Branstad, is the former governor of Iowa, a state that could be hit hard by agricultural tariffs.
The goal may be to get U.S. voters to stop Trump from doing more. Farm states generally backed Trump in the 2016 election and their exports could be hurt. “China is stirring up U.S. farmers to put pressure on the White House,” said Shen Dingli, deputy dean of the Institute of International Affairs at Shanghai’s Fudan University.
Wednesday’s announcement means there are now two U.S.-China trade battles playing out.
In late March, the U.S. announced steel and aluminum tariffs that would penalize China to the tune of about $3 billion a year. On Monday, China returned fire by imposing similar measures on $3 billion dollars worth of U.S. pork, fruit and other items.
Then, on Tuesday, the White House went ahead with tariffs that target manufacturing technology, arguing that Chinese trade practices have unfairly hurt U.S. business. China vowed a swift response — and followed through.
The question now is if Trump will move ahead with the tariffs as announced or change course, potentially going to the table with the Chinese side.
Shi Yinhong, a professor of international affairs at Renmin University in Beijing, said that China’s move has signaled the country’s willingness to go “tit for tat” in a trade war.
What comes next, he said, “depends on President Donald Trump.”
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The Washington Post’s Luna Lin, Amber Ziye Wang and Yang Liu contributed from Beijing.