Published: Sun, July 08, 2018
Money | By Armando Alvarado

U.S. soybean farmers say China tariffs could result in 'serious damage'

U.S. soybean farmers say China tariffs could result in 'serious damage'

With additional tariffs on Chinese products worth US$34 billion made effective on Friday, the United States has taken a risky step that will take a toll on its own economy.

"The markets had already sold off the prior two weeks", US Bank Wealth Management national investment consultant Dan Heckman said.

President Trump indicated that he will impose tariffs on another $16 billion in imports next week, with the possibility of extending the taxes to $500 billion of Chinese imports.

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". "We urge the Trump administration and China to rescind these tariffs that leave our farmers footing the bill". It accused the US of igniting "the biggest trade war in economic history".

US President Donald Trump said last week that he supports Congress to pass legislation to protect key technologies from acquisition by foreign entities.

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".

Acadiana soybean farmers are bracing for the worst case scenario after China imposes tariffs on American products.

The threat of a trade war has become a reality.

In addition to the $US16b under consultation, Mr Trump has flagged there could be more tariffs in store.

OSA cited an Ohio State University study that suggested these tariffs could lead to a 59 percent decrease in Ohio farmers' net income, and a Purdue University study suggesting total USA soybean exports to China could drop by 65 percent. -China tit-for-tat tariff fight is likely to shrink trade volume worldwide, which would weigh on the global economy that has been on a recovery track. It also is rooted in the clash between American notions of free trade and Beijing's state-led development model.

Al Jazeera's McBride said that the looming trade war has not played well "to the general business sentiment".

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Since 1996, when the USA exported only $414 million worth of soy to China, the crop has sprouted an exponential growth in trade.

Trump's confrontational outlook applies to other trading partners as well as China, said Tai Hui, chief strategist for JP Morgan Asset Management, in a report.

Beijing, which denies these charges, was swift in responding in kind after the first tranche of planned U.S. levies on Chinese goods announced by President Donald Trump kicked in on Friday.

China's government also announced it was adding this round of USA tariffs to an existing complaint filed with the WTO in April shortly after Washington unveiled the threat to punish Beijing for its policies on intellectual property.

"After the United States introduced the new tariffs, China's reciprocal measures also immediately took effect", said the spokesman for the Chinese Foreign Ministry Lu Kang.

Moscow also announced Friday it had slapped 25 per cent tariffs on some United States goods, joining the global push-back against Trump's offensive.

This prompted Beijing to respond in kind with levy tariffs on 545 items of USA imports, including agricultural products, vehicles and aquatic goods - also worth $34 billion, state-run newspaper The China Daily reported Friday.

USA officials accuse China of building its emerging industrial dominance by stealing the "crown jewels" of American technological know-how through cyber-theft, forced transfers of intellectual property and state-sponsored corporate acquisitions. "So we have 50 plus 200 plus nearly 300", he said. Trump has threatened to hit back with vehicle tariffs of 20%, which would be highly damaging for the German auto industry.

"But on the other hand, it is hard for US distributors to find substitutes as Chinese products have reasonable prices and good quality".

As the tariffs approached, the United States central bank warned the impending trade battle was beginning to darken the otherwise blue skies of the robust American economy, now in its 10th year of recovery.

The clash with China comes as the Trump administration is also fighting over trade with American allies such as Canada and the European Union.

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