Minutes after President Trump's last rates were in force, the Chinese government said on Tuesday that it imposed its own broad rates on the food imported from the United States and would in essence stop 15 American companies.
The Chinese Ministry of Finance brought 15 percent rates on the import of American chicken, wheat, corn and cotton and 10 percent rates for other foods ranging from soybeans to dairy products. Moreover, the Ministry of Trade said that 15 American companies should no longer be allowed to buy products from China, except with special permission, including Skydio, the largest American maker of drones and a supplier of the American military and emergency services.
Lou Qinjian, a spokesperson for the China's National People's Congress, punished the United States before violating the free trade rules of the World Trade Organization. “By imposing unilateral rates, the US has violated the WTO rules and disturbed the safety and stability of the global industrial and supply chains,” he said.
Mr. Trump has now tagged almost all goods from China with an extra rates of 20 percent since his nomination in January. He announced 10 percent rates on February 4 and another round on Tuesday. Mr. Trump also continued on Tuesday with 25 percent rates on Mexico and Canada, after a delay of a month.
China had responded to the rates of February by immediately announcing that it would start six days later with collecting extra rates for liquid natural gas, coal and agricultural machinery from the United States. But those rates only combined about a tenth of American exports to China, making them much narrower than Mr Trump's extensive rates.
The China campaign on Tuesday was much wider. China is the best overseas market for American farmers, which has a significant influence on the prices and demand on the raw material markets of the Midwest.
By directing the import of food, Beijing repeated his response to rates that Mr Trump imposed during his first term. In 2018, China set rates for American soybeans and much of his purchase to Brazil.
But the strategy was then Aapper: Mr. Trump responded by placing more rates for Chinese goods. Because the United States imports four times as much from China as it buys, China quickly became without American goods, it could impose rates. And American farmers had some success in finding other markets for their crops.
China's rates in 2018 also had less political impact in the United States than the leaders of Beijing had hoped they would do that. Three of the best soy-exporting states held elections for senate seats in November 2018, but there was little evidence that voters had the Chinese action against Mr Trump or the Republican Party. All three states saw democratic senators replaced by Republicans that year, because social issues proved more attractive than trade disputes for many voters.
Yet China has potential trade weapons that go much further than the rates for food. At the beginning of February, Beijing implemented restrictions on export to the United States of certain critical minerals, which are used in the production of some semiconductors and other technology products.
Blocking important materials from reaching the United States, a tactic that is known as Supply Chain warfare, entails considerable risks. Beijing is already struggling to attract foreign investments. The Chinese cabinet has publicly shifted its goal this winter to lure more foreign investments to stabilize it. The leaders of China have also stated that the attempt to strengthen the domestic economy of the country, weighed by the fall -out of a devastating delay of real estate, is a priority.
Beijing could make it even more difficult for American companies to do business in China, but that can also harm foreign investments. In addition to the effective prevention of 15 companies to buy Chinese goods, the Chinese Ministry of Trade added another 10 American companies on Tuesday to what it calls it an “unreliable list of entity”, so that they cannot do a company in China.
Many of the companies that China punished on Tuesday are military contractors. But the Ministry of Trade also blocked a biotech company called Illumina to do business in the country. The Illumina accused, which is located in San Diego, from violating market transaction rules and the discrimination of Chinese companies.
Chinese market bangers said at the beginning of February, after Mr Trump had imposed rates that month, that they had started an antimonopoly investigation into Google. Google has been blocked from the Chinese internet for more than ten years, but the relocation could disrupt the company with Chinese companies.
Mr. Lou, the spokesperson for the National People's Congress, gave the emerging strategy of his country in dealing with Mr Trump's rates by calling for closer trade relations with Europe.
“China and Europe can supplement each other's strengths and provide mutual benefits in many cooperation,” he said at a press conference prior to the opening on Wednesday of the annual weekly session of the Chinese legislative power.
But Europe has its own trade disputes with China, especially about electric vehicles. European politicians and managers have expressed great concern about how to deal with an expected further flow of export this year from China, which started with a far -reaching factory construction program.
The rapid rise in China since 2000 to the global priority in production, with a third of the output in the world, is, according to the data of the United Nations, at the expense of the American share of global industrial production. European countries have been wary to close factories and to rely on cheap import from China.
Mr. Trump was moved much faster to China rates during his second term than in his first. In 2018 and 2019 he imposed rates up to 25 percent, in phases, in the import worth around $ 300 billion a year. He then concluded a trade agreement with China in January 2020, leaving 25 percent rates on many industrial goods, while he reduced 15 percent rates for some consumer products to 7.5 percent and a few other rates.
Mr. Trump, on the other hand, has now imposed 20 percent rates on all goods that the American import from China, worth around $ 440 billion a year. This includes a few categories, such as smartphones, which he omitted during his first term.
Mr Trump's actions have increased the average rates this year for the affected Chinese import to 39 percent – compared to only 3 percent before he took office in 2017. Apart from China, Canada and Mexico, the United States imposes the rates on average about 3 percent on most trading partners.
The average rates of China for goods from most of the world are twice as high and much higher in imports from the United States.
In the first term of Mr Trump, the Chinese government reduced the taxes that it charges the exporters of the country. That gave them room to lower prices and to compensate for at least part of the rates for their customers, including many small American companies and large retailers such as Wal-Mart, Amazon and Home Depot.
As another way of rates, some Chinese exporters shifted the final meeting of their products to countries such as Vietnam, Thailand or Mexico, while maintaining the production of core components in China. Mr. Trump is now trying to stop part of the trade by Mexico, who see critics as a back door on the American market.
Many Chinese exporters resorted to the use of the so -called minimis exception on rates: Share shipments in many packages, each with a value of less than $ 800. Each shipping is then exempt from rates and customs operating costs and usually omitted from customs inspections and American import data.
At least $ 1 of every $ 6 of American import from China now arrives through the minimis shipments.
At the beginning of February, Mr Trump issued an order to briefly stop the minimis exemption for goods from China, Mexico and Canada. When piles of packages quickly gathered at American airports, he delayed the order for shipments from China until the procedures could be developed to be able to handle them, and his order for the minimis import from Canada and Mexico postponed a month. On Sunday he again delayed the action about that import from Canada and Mexico.
Alexandra Stevenson contributed report from Beijing and Chris Buckley And Amy Chang Chien Reported report from Taipei. Li you contributed research.
