In response to President Trump imposing tariffs on nearly $300 billion of goods imported from China, the Chinese government just announced their retaliation.
Starting on September 1, the Chinese government will impose an additional 5 percent tariff on 801 items imported from the U.S. as well as an additional 10 percent tariff on 916 other items. Included in this long list of products is American soybeans. The 10 percent tariff announced today will be in addition to a 25 percent tariff China placed on soybean imports starting July 6, 2018. U.S. soybean farmers have taken a hit due to the trade war. In 2017, the U.S. exported $12.2 billion (1.2 billion bushels) worth of soybeans to China, by far the largest importer of U.S. soybeans. After China’s retaliatory tariffs in 2018, soybean exports dropped 75 percent to $3.1 billion (302 million bushels).
On December 15, China will impose a 10 percent tariff on 163 items, as well as impose an additional 10 percent tariff on 749 items, and an additional 5 percent tariff on 2,449 items imported from the U.S. China will also impose a 25 percent tariff on imported automobiles and a 5 percent tariff on imported auto parts. This is all in retaliation for the president announcing additional tariffs on Chinese goods staring September 1 and December 15.
As long as the trade war with China and other countries persists, it’s increasingly likely that a third round, and a fourth round, of trade mitigation payments to farmers continues. So far, the USDA has promised $28 billion in trade aid. On top of the already generous safety net.