China slaps 15% tariffs on US coal and LNG moments after Trump’s new tariffs come into effect.
Trump’s 10% tariffs on China take effect, triggering retaliation
Beijing imposes some counter levies; to probe Google over alleged anti-trust breaches
China tariffs come even as Trump delays duties on US imports from Canada, Mexico
Oil drops, stock futures slide, yen pares loss.
On the surface, China’s reaction shows that leaders may not be as reluctant to engage in a tit-for-tat as analysts thought.
However, the levies are not as broad as America’s, and they wouldn’t impact nearly the same range of goods. While the US tariff — as Trump announced it over the weekend, at least — applies to all Chinese goods, Xi Jinping’s response is more targeted at coal, LNG and agricultural equipment.
What’s interesting is the probe into Google and adding two big US clothing companies to the unreliable entity list (essentially, a list of companies against which China may take punitive measures). That would prompt some major industries to start lobbying the US administration hard to work out a deal with China.
The failure to reach a compromise or stall the implementation of the tariffs raises the threat of a spiraling escalation that could decimate US trade with a Chinese economy heavily reliant on exports. Bloomberg Economics had estimated the US average tariff rate would go up by 1.4 percentage points should the duties on China go into effect.
Already, Soybean prices in Chicago have extended losses after China’s response. The Asian nation is the biggest buyer of US soybeans, and a trade war could be bad for American farmers.
