As the trade war escalates, China's retaliatory tariffs on US agricultural products begin
Another front of Donald Trump's trade war opened this morning. This has led to retaliation charges for China's US imports.
The tariffs announced last week aim to approximately $21 billion in agricultural imports from the United States, in response to an additional 10% tariff imposed on Trump's exports to the United States.
Beijing's movement covers a wide range of products. The Chinese province said last week that imports of US-grown chicken, wheat, corn and cotton will face 15% tariffs. Tariffs on sorghum, soybeans, pork, beef, seafood, fruits, vegetables and dairy products will increase by 10%.
This move could lead to more expensive and more competition in the Chinese market, and instead increase imports from other countries.
It's bad news for our farmers, increasing the risk of slowing the US economy…or falling into a horrific recession.
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The tariffs, announced last week, target about $21bn of agricultural imports from the US, in response to the extra 10% tariff imposed on China’s exports to the US by Trump.
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Beijing’s move covers a wide range of commodities. Imports of US-grown chicken, wheat, corn and cotton will face an extra 15% tariff, the Chinese ministry said last week. Tariffs on sorghum, soybeans, pork, beef, seafood, fruit, vegetables and dairy products will be increased by 10%.
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The move will make US products more expensive, and thus less competitive, in the Chinese market, which is likely to lead to more imports from other countries instead.
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That is bad news for US farmers, and increases the risks that the US economy slows… or even drops into the dreaded recession.
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Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
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“If it isn’t hurting, it isn’t working,” was the cry of then-UK-chancellor John Major in 1989, as the British government tightened policy to fight inflation and drove the country into a recession.
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But it could also be the catchphrase of the new American president, who appears relaxed about concerns he could trigger a US downturn.
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Donald Trump has refused to say whether his trade policies means the US economy is facing a recession or higher inflation, arguing that a “period of transition” is taking place.
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Instead, he told Fox News show Sunday Morning Futures:
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“I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.
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And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us.”
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The comments mirror Trump's lines about how tariffs cause “a bit of a disturbance” in his latest speech last week.
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Trump was talking to Fox shortly after the latest US employment report picked up unemployment rates in February, but employment growth also rose by 151,000 in February.
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That employment data calmed some nerves about the looming “Trump Session,” but economists are concerned that cutting the federal government will undermine growth by hitting tariffs on key trading partners.
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Kyle Rodda, Senior Financial Market Analyst capital.com, say:
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President Trump implies that he is willing to tolerate weaker growth as the economy “migrates”. This could make investors' feelings even more sour.
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Data added to the notion that the US economy is being eased and its performance is converging with the rest of the world. The rate market is responding to increasingly disappointing data and negative surprises in activity, indicating that the Fed should restart its cut rates in July, if not June.
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Agenda
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7am: Trade balance data for Germany in January
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2:15pm GMT: Audience Home-based Labor Commission on Work-from-Home Development
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Important Events
China's stock market is falling today as the double whammy of trade war horror and deflation has heavily on investors.
CSI 300 The index fell by 0.4% while in Hong Kong It's going down Seng The index was 1.8% slide.
IPEK OzCaldeskayaAdvanced Analyst swissquote bankcalled it “an ugly week of sell-off in China,” adding:
This week we'll start with a sharp negative note on Chinese stocks as the latest inflation updates showed China's consumer prices fell the most in more than a year…
Overall, this week is expected to bring more tariffs on China's tariffs on US agriculture, with some Canadian products starting today, and US steel and aluminum tariffs coming out from Wednesday.
The US-China trade war occurs when China's economy is already struggling with weak inflation.
Consumer prices fell in February, bringing the first negative read since January 2024 down to -0.7% CPI inflation rate in February.
China's deflationary pressure is “deep” Stephen Innes, Managing Partners of SPI Asset Management, addition:
Monday begins with the same old deflation drum beat that fell deeper than expected, falling below zero for the first time in over a year. Data will only be reinforced for several months. The pressure for rejection remains firmly established in the world's second largest economy.
The real estate sector remains stuck in the mud, with domestic demand weaker and despite the bounce of high-tech inventory, the broader wealth effect is not filtered to consumers.
China also announced new tariffs on Canada last weekend, causing an early headache for next prime minister Mark Kearney.
Beijing has brought tariffs on more than $2.6 billion in Canadian agricultural products in retaliation for the taxation of Chinese-made electric vehicles and steel and aluminum products introduced by Ottawa in October last year.
The Commerce Department said in a statement.
“The Canadian measures are discriminatory measures that seriously violate the rules of the World Trade Organization, constitute a typical protectionist act, and seriously harm China's legitimate rights and interests.”
China will apply 100% tariffs to imports of Canadian rapeseed oil, oilcakes and peas over $1 billion, and a 25% obligation on $1.6 billion worth of Canadian aquatic products and pork.
As the trade war escalates, China's retaliatory tariffs on US agricultural products begin
Another front of Donald Trump's trade war opened this morning. This has led to retaliation charges for China's US imports.
The tariffs announced last week aim to approximately $21 billion in agricultural imports from the United States, in response to an additional 10% tariff imposed on Trump's exports to the United States.
Beijing's movement covers a wide range of products. The Chinese province said last week that imports of US-grown chicken, wheat, corn and cotton will face 15% tariffs. Tariffs on sorghum, soybeans, pork, beef, seafood, fruits, vegetables and dairy products will increase by 10%.
This move could lead to more expensive and more competition in the Chinese market, and instead increase imports from other countries.
It's bad news for our farmers, increasing the risk of slowing the US economy…or falling into a horrific recession.
Introduction: Trump has not ruled out recessions
Good morning and welcome to our comprehensive coverage of our business, financial markets and the global economy.
“If it doesn't hurt, it's not working,” was the cry of then-Principal John Major in 1989.
But it could also be the catchphrase of a new US president who appears to be relaxing about concerns that could cause a recession in the US.
Donald Trump His trade policy refuses to say whether it means that the US economy is facing a recession or higher inflation, claiming that a “transition period” is taking place.
Instead, he told Fox News Show Sunday Morning Futures.
“I hate predicting such things. What we do is so big, so there's a period of transition. We're bringing wealth back to America. That's a big deal.
And it always takes a little time and takes a little time. It will take a little time, but I think it should be great for us. ”
The comments mirror Trump's lines about how tariffs cause “a bit of a disturbance” in his latest speech last week.
Trump was talking to Fox shortly after the latest US employment report picked up unemployment rates in February, but employment growth also rose by 151,000 in February.
That employment data calmed some nerves about the looming “Trump Session,” but economists are concerned that cutting the federal government will undermine growth by hitting tariffs on key trading partners.
Kyle Rodda, Senior Financial Market Analyst capital.com, say:
President Trump implies that he is willing to tolerate weaker growth as the economy “migrates”. This could make investors' feelings even more sour.
Data added to the notion that the US economy is being eased and its performance is converging with the rest of the world. The rate market is responding to increasingly disappointing data and negative surprises in activity, indicating that the Fed should restart its cut rates in July, if not June.
