China’s retaliatory tariffs on US farm goods take effect Monday
Chinese officials have signalled confidence they can navigate trade tensions with US President Donald Trump
[NEW YORK] Chinese tariffs as high as 15 per cent on a range of US agricultural goods take effect on Monday (Mar 10), potentially exacerbating a trade dispute between the world’s two largest economies.
The levies announced last week are far-reaching, touching commodities from beef and poultry to grains. Along with the tariffs, Beijing also said it would completely suspend soybean imports from three US entities and also halted purchases of American logs.
Beijing’s move came after the Trump administration doubled a blanket tariff on all Chinese exports. China’s measures hit goods the Asian nation can source from other countries, shielding the domestic economy from blowback.
Chinese officials have signalled confidence they can navigate trade tensions with US President Donald Trump. Last week, Finance Minister Lan Fo’an said on the sidelines of an annual legislative session in Beijing that central government has ample fiscal policy tools and space to respond to possible domestic and external challenges.
The Chinese retaliation appeared calibrated to avoid any escalation after Trump kicked off a global trade war, leaving room for talks between the two sides. Though the US leader has signalled a willingness to speak to Chinese President Xi Jinping, so far no discussions have been announced.
The new Chinese tariffs come as the Asian nation’s lawmakers gather for the National People’s Congress in Beijing. At the meeting last week, Premier Li Qiang set a growth goal of about 5 per cent, an ambitious target given the trade uncertainties, a lingering property crisis and deflation dogging the economy.
On Sunday, official data showed consumer inflation dropped far more than expected to fall below zero for the first time in 13 months.
Core CPI, which excludes volatile items such as food and energy, decreased for the first time since 2021 with a drop of 0.1 per cent – only the second time the gauge has contracted over more than 15 years.
In an effort to ramp up spending and counter US tariffs, Li also said China was raising its general budget deficit to the highest level in more than three decades. BLOOMBERG
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