China has increased its tariffs by up to 25 percent or $3 billion per year in US’ food imports. This escalates a spat between the world’s two biggest economies.
The tariffs took effect on Monday. The retaliatory tariffs came amid trade tensions between Beijing and Washington, which have shaken global financial markets last week. Investors feared a full-blown trade spat between the two countries, which would severely affect the global economy.
China’s Ministry of Commerce said it would be a ‘countermeasure’ in response to Trump’s move to slap tariffs on steel and aluminum imports.
The ministry added that it ‘suspends its obligations’ to the World Trade Organization (WTO) to reduce tariffs on 120 food products such as dried fruits, almonds, pistachios, and wine. These products are subject to an additional 15 percent tariff. Other 8 items, such as frozen pork, and certain fruits and nuts, are subject to a 25 percent tariff.
“China’s suspension of tariff concessions is a legitimate action adopted under WTO rules to safeguard China’s interests,” the ministry added. They also included that US and China must resolve issues through negotiation and dialogue, “As the world’s two largest economies, cooperation is the only correct option.”
Analysts say China avoids an all-out trade war by not covering some of the United States’ biggest exports to China, such as soybeans.
“The amount subject to tariff is not big, which shows China is willing to ease the intensity of the trade conflict that was started by the US. Trump gave us a heavy shot, and China is giving a light shock back,” a US research director said.
Trump, on the other hand, announced separate plans to slap tariffs nearly $50 billion in Chinese imports. He aims to punish Beijing for allegedly stealing American technology and pressuring the US companies to hand it over.
US Dairy Group Partners with Chinese Researchers to Boost Trade Opportunities
The US Dairy Export Council (USDEC), a US dairy trade export company, has partnered with China’s Jiangnan University to create a food science research center as it hopes to bolster relations and expand dairy exports from the United States to China.
The two parties signed the memorandum of understanding on Monday amid rising trade tensions between US and China.
The agreement also aims to boost the development of food products for Chinese consumers that use US dairy as ingredient. It also gives US’ dairy exporters a better understanding of working with Chinese food manufacturers. Finally, it bolsters the Chinese students’ academic research into dairy.
“The agreement is the last effort by the USDEC to boost business with China, including an agreement last year on US dairy plant registration and a unilateral reduction in Chinese cheese tariffs,” the USDEC president said.
China and Hong Kong combined were the third largest export markets for US dairy products in 2017. US dairy exports worldwide reached $5.48 billion in 2017, according to the government and trade data.
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