American-Chinese trade war heating up

Welcome to the U.S.–China trade war.

American President Donald Trump announced tariffs on imports of steel and aluminum today, setting the stage for China to retaliate with its own tariffs on U.S. products, possibly on things like corn and soybeans.

The U.S. tariffs on steel will be 25 percent. For aluminum the tariff will be 10 percent.

China is the largest steel-maker in the world and Trump has complained, many times, about China’s unfair trade practices. He’s accused China of dumping goods into the U.S. at low prices, so the tariffs are a direct shot at China’s steel industry.

The tariffs announced today add to a U.S. tariff announced earlier this winter on imported solar panels. China is the world’s largest producer of solar panels.

American farmers are a likely target of a Chinese response, as the U.S. exports billions in corn, soybeans, pork and other agri-commodities to China.

“These tariffs are very likely to accelerate a tit-for-tat approach on trade, putting U.S. agricultural exports in the cross-hairs,” said Brian Kuehl, executive director of Farmers for Free Trade, a U.S. lobby group.

“Already we have seen China discuss tariffs on sorghum. The EU and China have also indicated they will move forward with swift retaliation in the wake of these tariffs.”

Speaking at a press conference this morning in Mexico City, where representatives of Canada, Mexico and the U.S. are re-negotiating the North American Free Trade Agreement, Kuehl said trade is not a win-lose scenario, where importing a good is a loss and exporting a product is a win.

“We believe, very strongly, that trade is not a zero sum game.”

In the press release on the proposed steel tariffs, Kuehl added the U.S. must hold its trading partners accountable.

But raising tariffs is a risky business, especially for farmers.

“The agriculture sector knows from experience that our ag exports are the first to be hit by retaliation…. Historically, agriculture always has the biggest target on its back.”

The U.S. tariffs on steel and metals have been rumoured for a while, as the U.S. administration has talked about the need to protect industries that are important to national security.

It’s unclear when the tariffs will take affect or which countries will be included because the announcement didn’t mention such details.

Canada could be caught up in the tariffs, as it is the No. 1 exporter of steel and aluminum to the U.S.

The steel and aluminum tariffs could now dominate NAFTA talks in Mexico City, where negotiators were making progress on the three-nation trade deal.

Contact robert.arnason@producer.com

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