WASHINGTON – China has retaliated against President Donald Trump’s tariffs with an additional 15% tax on major American agricultural products, including chicken, pork, soy and beef.
Escalating trade tensions punished the US market on Monday as investors placed money elsewhere for fear of damage from Trump’s trade war.
China’s tariffs announced last week were in response to Trump’s decision on March 4 to double the collection of Chinese imports by 20%. China’s Ministry of Commerce previously said that goods already in transit will be exempt from retaliatory tariffs until April 12th.
Impacting tariffs on imports is an important part of Trump’s agenda. He believes import taxes can raise funds for the Treasury Department, protect the American industry, protect foreign pressures, and do what they want on a variety of issues, including immigration and drug trafficking.
On Wednesday, Trump plans to remove the 25% steel tariff he imposed in 2018 (effectively raises taxes), raising collections on aluminum from 10% to 25%.
In a series of confusing announcements last week, Trump slapped tariffs on imports in Canada and Mexico, delaying many of them for 30 days. Next month he was able to paint a “mutual tariff” intended to raise US tariffs to match higher tariffs imposed by foreign countries on a wide range of imports from around the world.
Economists warn that tariffs will raise consumer prices and reduce the efficiency of the US economy as protected American companies have fewer incentives to innovate.
There is also the threat of retaliation, and farmers, one of Trump’s most loyal supporters and some vigilant defenders in Congress, create attractive targets.
China also struck American agricultural products during the president’s first trade war. US farm sales to China plummeted, then recovered after the two countries reached an armistice in January 2020, with Beijing pledging to buy more from US farmers. American farm exports to China peaked at $38 billion in 2022, then fell to $29 billion in 2023 and to $25 billion last year. According to the US Department of Agriculture, January saw a 56% decrease from the previous year.
During his first term, Trump spent hundreds of billions of dollars in taxpayer money to compensate farmers for lost exports.
