Tariffs From China on Certain U.S. Agricultural Products Began Monday

What Happened?

China imposed up to fifteen percent tariffs on a large number of U.S. agricultural products Monday.

That was in retaliation for the U.S. tariffs imposed on Chinese goods by the Trump Administration. 

Among the long list of products affected included chicken, pork, beef, and soybeans. 

Why it Matters

China is the second largest economy in the world after the United States, and the new tariffs will most likely be felt largely but not exclusively by American farmers because the new taxes fall mostly on the U.S. farm sector. 

China is the biggest export market for American farmers, importing some twenty billion dollars’ worth of goods from the products singled out for tariffs alone.

While the Trump Administration also imposed tariffs on Mexico and Canada, a key difference is leaders from those countries have either spoken to President Trump directly or through intermediaries, whereas China’s top officials have not held similar talks. 

While Canada and Mexico have been more willing to make deals with the Trump Administration, China has taken a much firmer stance.

The hesitance of China’s officials to negotiate with the Trump Administration most likely stems from a couple of factors. One, China regards itself as a peer nation to the United States while Canada and Mexico do not. 

A second reason is that many Chinese officials have expressed confusion over the tariffs. That indicates they don’t know what the Trump Administration wants in return, not that they aren’t willing to make a deal. 

Patricia Kim, a fellow at the Brookings Institution, said “There’s just confusion about the Trump Administration’s real intentions. They want to know what kind of deal Trump is looking for.” 

China’s President Xi Jinping has yet to meet with President Trump since the start of Mr. Trump’s second term in office. Several lower-level officials in China’s government have indicated they hope to start talks soon, but China’s President has remained tight lipped on the subject. 

It’s also possible China has adapted and learned from the first Trump Administration. During Mr. Trump’s first presidency, China immediately signaled a willingness to negotiate when confronted with possible tariffs.

This time, China has been willing to wait and to respond with tariffs of their own on American goods.

Beijing’s public stance has been to match the U.S. tariffs without negotiations. But several back-channel efforts are likely already underway from a number of different academic and other officials not directly affiliated with China’s government. 

How it Affects You

China and the United States are major trading partners. Leaders from both countries will be under pressure to find a solution that isn’t harmful to their respective economies. 

But the most likely way for that to happen is for President Xi and President Trump to discuss things directly, and so far neither side has shown a willingness to make the first move.