Beijing’s tariffs on certain US agricultural goods in retaliation for US President Donald Trump’s latest hike on Chinese imports came into force yesterday, as trade tensions mount between the world’s two leading economies.
Since retaking office in January, Trump has unleashed a barrage of tariffs on major US trading partners, including China, Canada and Mexico, citing their failure to stop illegal immigration and flows of deadly fentanyl.
After imposing a blanket 10 percent tariff on all Chinese goods early last month, Trump hiked the rate to 20 percent last week.
Photo: Carlos Barria, Reuters
Beijing reacted quickly and announced fresh measures of its own, with levies of 10 and 15 percent imposed on several US farm products, including chicken, wheat, corn and cotton. Soybeans, sorghum, pork, beef, aquatic products, fruit, vegetables and dairy will face a slightly lower rate.
Analysts said Beijing’s retaliatory tariffs are designed to hurt Trump’s voter base while remaining restrained enough to allow room to hash out a trade deal.
The increasing trade headwinds add to difficulties faced by Chinese leaders seeking to stabilize the country’s wavering economy.
Analysts said China’s exports — which last year reached record highs — might not provide the same economic lifeline for Beijing as its trade war with Washington intensifies.
China’s exports grew 2.3 percent year-on-year during the first two months of this year, official data showed on Friday, missing expectations and slowing significantly from the 10.7 percent growth recorded in December last year.
Separately, Trump on Sunday declined to rule out the possibility that the US might enter a recession this year.
“I hate to predict things like that,” he said when asked directly about a possible recession this year.
“There is a period of transition, because what we’re doing is very big — we’re bringing wealth back to America,” he said. “It takes a little time.”
Asked whether Americans should brace for a downturn, US Secretary of Commerce Howard Lutnick was more definitive when asked about the possibility of a recession, saying: “Absolutely not.”
Trump’s on-again, off-again tariff threats against Canada, Mexico, China and others have left US financial markets in turmoil and consumers unsure what the year might bring. Stock markets just ended their worst week since the November election.
Measures of consumer confidence are down, as shoppers brace for the higher prices that tariffs can bring, while widespread government layoffs being engineered by Trump’s billionaire adviser Elon Musk add further concern.
Economists at Goldman Sachs Group Inc have raised their odds of a recession over the next 12 months from 15 percent to 20 percent, while Morgan Stanley predicted “softer growth this year” than earlier expected.
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