China retaliates against Trump tariffs with levy on US food imports

China’s ministry of commerce has implemented reactionary tariffs of up to 25% on $3bn of US food imports.

A spokesperson for the ministry explained it would suspend concessions on 120 US food imports, with fresh and dried fruits subject to 15% tax, while other items such as frozen pork would receive the full 25% tariff. China spent $1.1bn on US pork products last year, according to the US Meat Export Federation.

The decision came in retaliation for US President Donald Trump’s announcement that the US will be increasing levies on steel and aluminium. Trump pledged last month to place a 25% tariff on $60bn worth of annual imports from China. The European Union has planned to impose its own tariffs following Trump’s announcement.

While the ministry argued that many welcomed the measures in order to protect the country’s economic interests, it conceded that the two governments should resolve the issue diplomatically, saying: “As the world’s two largest economies, cooperation is the only correct option.”

According to Renmin University analysts, China’s decision to not tax soybean exports shows that the government does not want to trigger a trade war with the US, with Renmin University US research centre director Shi Yinhong saying: “The amount subject to tariff is not big, which shows China is willing to ease the intensity of the trade conflict that was started by the US. Trump gave us a heavy shot, and China is giving a light shot back…Even if this conflict can be eased, it won’t last long. There will be rounds after rounds of trade wars in the future.”

China’s top economic adviser Liu He spoke with the US treasury secretary Steven Mnuchin last week to arrange a face-to-face meeting in order to discuss the tariffs. On a three-day visit to China, US Senator Elizabeth Warren hinted that the US trade policy towards China has been until recently ‘misdirected’, further commenting that “We told ourselves a happy face story that never fit with the facts. Now US policymakers are starting to look more aggressively at pushing China to open up the markets without demanding a hostage price of access to US technology.”

China could still retaliate further according to experts, with some calling for soybean tariffs, as well as taxes on big-ticket goods such as Boeing aircraft produced in China.