In a move that upset many U.S. businesses, especially agricultural interests and farmers, President Donald Trump said Friday morning that he is going to impose new tariffs on 1,102 Chinese products and the amount of the tariffs would be about $50 billion.
Unsurprisingly, China took little time to respond to Trump’s aggressive move. Later on Friday they announced that they will be imposing similar large tariffs on U.S. goods as retaliation for Trump’s new tariffs.
The people hit hardest by China’s new tariffs will be some of the president’s biggest supporters in rural areas and in red states.
Since Trump said his administration would impose duties on $50 billion worth of Chinese imports, Beijing said they would also impose the same tariffs on $50 billion worth of U.S. goods shipped to China. The new policy from China was announced on their Ministry of Finance website Friday. It said that 659 different U.S. products would be affected.
Farm businesses will be hit hardest by China’s actions since the first bundle of tariffs on 545 U.S. products worth about $34 billion will be levied on agricultural products, such as soybeans, corn and wheat, beef, pork and seafood. The new Chinese tariffs will begin on July 6.
The Ministry of Finance website also said that additional tariffs on 114 more U.S. products will start at a later date. The products affected by the second batch of tariffs include such major U.S. exports as oil, gas, coal and medical equipment.
When Trump announced his new tariffs on Friday morning China’s Ministry of Commerce had promised they would respond in kind very quickly. Trump, however, then said that if China did retaliate he would impose even more additional tariffs.
“Our hope is that it doesn’t lead to a rash reaction from China,” U.S. Trade Representative Robert Lighthizer said in an interview on Fox Business Network on Friday.
“We hope that this leads to further negotiations and we hope it leads to China changing its policies, at least with respect to us, and opening up their market,” Lighthizer said.
But the president’s former economic adviser Gary Cohn said that waging a trade war could start a chain reaction that ends in an economic crash. With Trump’s announcement and China’s retaliation on Friday it appears that the trade war may have already begun.
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