The trade spat between the world’s two largest economies is growing.
On Friday, China announced that it would impose another round of tariffs on $60 billion of American goods if President Donald Trump followed through on his proposed tariffs.
“The implementation date ... will be subject to the actions of the US, and China reserves the right to continue to introduce other countermeasures,” the Chinese State Council, a government body, said in a statement. “Any unilateral threat or blackmail will only lead to intensification of conflicts and damage to the interests of all parties.”
The announcement comes just two days after Trump proposed increasing existing tariffs on Chinese goods.
It’s all part of a trade feud that started back in March, when Trump threatened to impose tariffs on China because he claims the country forces American companies to spill US technology secrets if they want to do business with China.
On July 6, the US officially imposed tariffs on $34 billion of Chinese goods. On the same day, China retaliated with its own tariffs of the same weight on $34 billion of American products.
Then earlier this month, the US president announced he would hit the country with a second round of 10 percent tariffs on $200 billion worth of Chinese goods. On Wednesday, he proposed increasing the amount from 10 to 25 percent. According to the New York Times, Trump advisers want to pressure China into negotiating with them. As of July 6, the US and China have hit each other with import taxes worth $34 billion.
“The trade war is a tactic by Trump, but if it eventually evolves into a strategic confrontation, the result will undoubtedly be disastrous,” Lu Xiang, a US-China trade expert at the Chinese Academy of Social Sciences, told the Washington Post.
Trump’s trade feud has caused serious damage for American farmers
But a recent farm-group study estimated that soybean, corn, and wheat farmers have already suffered a collective $13 billion loss from Trump’s trade wars, according to the New York Times. And prices for soybeans have reached their lowest levels in 10 years.
As Vox’s Tara Golshan wrote, “Agriculture has incredibly low barriers to trade, making the industry an easy target for retaliatory tariffs.”
In response, Trump is planning to give $12 billion in subsidies to American farmers who have been hurt by his trade spats with China, Canada, Mexico, and several other countries.
Many Republican representatives aren’t happy with Trump’s decisions. “If tariffs punish farmers, the answer is not welfare for farmers. The answer is remove the tariffs,” Sen. Rand Paul (R-KY) tweeted earlier this month.
But with Trump’s latest tariff proposal and China’s retaliatory threats, it’s clear that neither country is willing to back down — at least for now.
“Increasing the size of the tariffs is merely increasing the harm that will be done,” Matthew Shay, president of the National Retail Federation, told the New York Times. “Tariffs are an unacceptable gamble with the U.S. economy, and the stakes continue to rise with no end in sight.”