China Strikes Back - Retaliates With $50 Billion Tariffs On US Goods

Update: As China refines its retaliatory tariffs, it clarified Friday afternoon in New York that tariffs on US soybeans will begin July 6, while tariffs on US crude oil, natural gas, coal and some refined oil products will begin at a later date.

Meanwhile, US aircraft are not on the tariff list.

* * *

Just as China promised, they have responded "immediately" to President Trump's "very big tariffs" and just unveiled $50 billion in tariffs against US goods including soybeans, light aircraft, orange juice, whiskey and beef, starting July 6th.

Mirroring the US tariffs scheme, China's Ministry of Finance is setting a two-tier system with $34bn on July 6th and $16bn more to follow...

On June 15, 2018, the U.S. government issued a list of goods subject to tariffs, which will impose a tariff of 25% on about 50 billion U.S. dollars of goods imported from China, of which about US$34 billion will be goods from July 6, 2018. It began to impose tariffs and began to solicit public opinions on about 16 billion U.S. dollars in tariffs. The U.S. measures violated the relevant rules of the World Trade Organization and it is contrary to the consensus reached in the Sino-U.S. negotiations. It seriously violates our legitimate rights and interests and threatens the interests of our country and people.

According to the "People's Republic of China Foreign Trade Law," "The People's Republic of China Import and Export Tariff Regulations," and other laws and regulations and the basic principles of international law, the State Council Tariff Commission decided to impose an additional 25% on 659 items of US$50 billion imported goods originating in the United States. Tariffs, including 545 items of approximately US$34 billion in goods, have been subject to additional tariffs since July 6, 2018, and the implementation time of additional tariffs on other commodities has been announced separately.

List 1 here (Chinese only for now)...

List 2 here (Chinese only for now)...

The response from China signaled a rapid escalation of the dispute. China will impose tariffs with “equal scale, equal intensity” on imports from the U.S. and all of the country’s earlier trade commitments are now off the table, the Commerce Ministry said in a statement on its website late Friday.

This is exactly what Goldman Sachs was worried about:

"We expect a minimal effect on growth and consumer price inflation from the tariffs, if implemented, but the announcement raises the odds that additional restrictions will be proposed over coming months."

Things are about to get a lot more expensive...

Comments

FireBrander Fri, 06/15/2018 - 13:40 Permalink

Two main sources of Soy for China...and China buys a lot of Soy...

1. USA.

2. Brazil

Brazil cannot supply all of China's needs...long story short...In the long run, not buying US Soy hurts China more than it hurts the USA; supply will drop as US farmers cut back, the price will rise and China will have no choice but to buy US soy at the new, higher, price than when the trade war started.

Trump is right, we hold the winning hand in the Tariff wars; we just can't be weak-kneed and fold.

ultraticum beemasters Fri, 06/15/2018 - 15:03 Permalink

It really sucks to be a soybean farmer in the US now.

Uh, last time I checked, the Farm Belt was 100% full-retard Statist.  The small town banksters around these parts joke that farmers do better in bad years than good.  Uncle Samuel's got their back.

Ever hear the oldie but goodie:  Why do farmers have to tightly round the bill on their baseball caps?  So they can fit their head into the mailbox when they pickup their welfare check.

In reply to by beemasters

janus Joe Trader Fri, 06/15/2018 - 16:24 Permalink

"...goods including soybeans, light aircraft, orange juice, whiskey and beef, starting July 6th."

...future headline...

>"Chinese Middle Class Revolt, (Red) October 7th"

great job, globalists.  40 years ago, these people derived 90% of their protein from bugs.  you've now addicted them to meat-based protein.  there are no substitute formulas to replace soy in hog feed.  there are no alternative sources (especially in season) to american soy.  all animals great and small go absolutely brezerk when denied protein -- especially humans.  so, in one fail swoop, chinese state planners are about to initiate the next great peasant revolt.  no pork, no beef, no whiskey = you're fucked, sinoman.

chinese leaders are throwing a tantrum. instead of biting the bullet and signing on to fair trade policies, they think they can retaliate by targeting businesses perceived as crucial to Trump's support.  

they do not realize that episodes like these convince most that, yes, china's time has come and gone.  time to start favoring india.

janus

In reply to by Joe Trader

PrayingMantis beemasters Fri, 06/15/2018 - 15:14 Permalink

 

    ... $50 B is a mere drop in the Chinese 3.111 Trillion US$ reserves bucket ...

 

   ...  let’s look at reality ...

 

   ... “Estimated Chinese Gold Reserves Surpass 20,000 Tonnes (June 2017) ... 

         ... >>> https://www.bullionstar.com/blogs/koos-jansen/estimated-chinese-gold-reserves-surpass-20000-tonnes/ ...

 

   ... “Gold Reserves in the United States remained unchanged at 8134 Tonnes in the second quarter of 2018” ...

          ... >>> https://tradingeconomics.com/united-states/gold-reserves ...

 

   ...  “China's foreign exchange reserves USD 3.111 trillion in May of 2018” ... 

          ... >>> https://tradingeconomics.com/china/foreign-exchange-reserves ... 

 

   ... “ US Total debt ... $70.4 Trillion and counting (real fast) “ ...

           ... http://www.usdebtclock.org/...

 

     .... IMO, it looks like China would be okay ... and if we add the BRI (belt/road initiative) and the petro-yuan into the equation, China will come up ahead ... 

 

In reply to by beemasters

Sanity Bear beemasters Fri, 06/15/2018 - 15:37 Permalink

The lack of sympathy is a direct result of the massive subsidies chewed up by the ag industry and the gross, perverse distortions of our political process that have resulted from it.

As long as I can't buy gasoline without ethanol in it at every single gas station because the ag industry bribes legislators into stealing our money on their behalf, fuck the ag industry. I hope they all rot and die.

In reply to by beemasters

FringeImaginigs Gaius Frakkin'… Fri, 06/15/2018 - 14:30 Permalink

Exactly  HaHaaHaaa... orange juice and whiskey!!  How about we stop selling them computer chip designs, microelectronics designs, genetics research results... all the really high tech inovative cutting edge intellectual results that powers the USA.  Let them go back to farming orange juice and whiskey!  ... until things get back to a fair trade level playing ground.

In reply to by Gaius Frakkin'…

silvermail FringeImaginigs Fri, 06/15/2018 - 14:56 Permalink

RE: Exactly  HaHaaHaaa... orange juice and whiskey!! 

Exactly  HaHaaHaaa... In the field of supercomputers, the US lags behind China for 20 years! And in the field of military laser technology, the US is also lagging behind China for 10 years.
So keep on being ignorant and drink your orange juice and whiskey.

Continue to enjoy your imaginary US exclusivity.

In reply to by FringeImaginigs

FireBrander Shitonya Serfs Fri, 06/15/2018 - 14:00 Permalink

Would be nice if the Republicans controlled Congress and worked with Trump to get that production back in the USA...Trump has stacked on the Tariffs, now it would be nice if Congress offered some juicy tax savings for "Made in the USA".

If you really want to see the USA economy take off...get the "health insurance" gorilla off the backs of American businesses...where's the Republicans health plan? I think their plan is to wait until the Democrats take over and then resist "Socialized Medicine" while fully/increasing funding for the VA which is TEXTBOOK PURE "Socialized Medicine".

Feckless Cunts.

(love that phrase)

In reply to by Shitonya Serfs

Consuelo FireBrander Fri, 06/15/2018 - 14:35 Permalink

It's not just about taxes - as the share buyback circus has firmly put lie to.

It is about over-regulation.   And even then, no mega-multinational worth its salt is ever going to set up shop here in the U.S. and take the profit margin cut, just for the sake of team USA...

This what so many fail to grasp - you don't just flick a switch and retrace 35 years of offshoring and expect halcyon days to return.    This is going to be a painful grind - and that is if we're lucky enough...

In reply to by FireBrander

William Dorritt FireBrander Fri, 06/15/2018 - 15:00 Permalink

Repeal the entire tax code and replace it with a 15% sales tax and tariffs to pay for the govt.

Repeal every POS health care law since the Kennedy assassination, all provided for lower service and higher cost than when the US had Capitalism instead of the current Socialism of the LBJ Great Society.

Too bad the Republican Leadership is a bunch of chicken shit pussies tied to the strings of the Welfare State and the Chamber of Commerce. $21T in debt and sinking.

In reply to by FireBrander

afronaut Justin Case Fri, 06/15/2018 - 14:32 Permalink

Maybe because the US is no longer white Anglo Saxon, like it once was. Nothing left for the gifted to strive for. You know, affirmative action and moar women doing the work(science and engineering) that men should be excelling at.

China is a homogeneous country, with an above average IQ population. Like the US and Europe used to be. That's important

In reply to by Justin Case

I am Groot Justin Case Fri, 06/15/2018 - 17:32 Permalink

These 600,000 engineers a year are they same dipshits stealing EVERYTHING from the US and making Harbor Freight tools that fail after 5-10 uses. HA HA HA. Your argument is totally full of hot air and shit Dude. China wouldn't even have a space or missile program without the US doing all of the work and using our brains. You can thank the dress soiling traitor Clinton for that.

Almost every major breakthrough in technology has been discovered in the US. Other countries have made discoveries or improved on our inventions. But the majority of the brain legwork was done here. Could that change in the future ? Most definitely. We have an entire generation of Tide Pod eaters and condom in the nose snorters. So we are losing a whole generation of engineers, chemists, doctors, and scientists.

In reply to by Justin Case

DemandSider peopledontwanttruth Fri, 06/15/2018 - 15:40 Permalink

They would lose money, unless they have government contracts. These CCP owned non profits are impossible to compete with, and the neoliberals running this place know it:

https://en.wikipedia.org/wiki/Category:Government-owned_companies_of_Ch…

All banker run Anglo countries are headed down the same, deindustrialization path. The U.K. has no large scale domestic brand vehicle manufacturing anymore, and Australia has lost ALL car brand manufacturing.

Consider buying some polluted land in the formerly wealthiest city in The U.S., Detroit, raise some horses, and selling the dung for fuel. It'll burn really well.

In reply to by peopledontwanttruth

baldknobber FireBrander Fri, 06/15/2018 - 14:01 Permalink

China is currently buying most of the soy they need from Brazil, their crop just came in and China won't have to buy a lot of US beans until the fall. That gives everybody time to act appropriately tough then still get a deal done before the real rubber hits the road. . You don't see American Ag/ Bean groups going apeshit because the beans are in the ground and they know it will be resolved before the combines fire up

In reply to by FireBrander

Sandmann FireBrander Fri, 06/15/2018 - 14:06 Permalink

You forgot about Argentina and China.........

They feed it to pigs and could probably change the feedstuff.  Good to know USA only grows the stuff for China just as it only grows peanuts to sell to EU and only produces Harley-Davidsons for export to EU.

Of course US holds winning hand - tariffs are the way to go when you run a $566 bn trade deficit. Trump should impose 20% Federal Sales Tax too  to help the budget deficit

In reply to by FireBrander