When mutually threatened tariffs on $34 billion goods come into effect this Friday, China will get a head start on the United States, Reuters reports.
Implementation is set to start at midnight July 6 in both countries, which gives Beijing a 12-hour advantage on Washington. President Donald Trump has threatened to increase the scope to $450 billion if China indeed retaliates against his 25% tariff.
The list of Chinese products targeted with U.S. tariffs include vaping devices, rare earth metals and LED light bulbs. A Reuters analysis found just 1% of the 1,102 categories of products imported from China to the U.S. are consumer goods. The rest are capital or intermediary products, taxed with the the intention of making American companies’ supply chains less reliant on Chinese goods.
China’s tariff targets include pork, wheat, rice and dairy products. The South China Morning Post said China is likely to cancel orders for 1.1 million tons of soybeans from the U.S. this year. China accounts for about half of America’s soybean exports, worth about $14 billion annually, CNBC says.
Chinese newspapers described the move as a counterstrike in an escalating trade war. “China has already made preparations. As long as the United States issues a so-called tariff list, China will take necessary measures to firmly protect its legitimate interests,” Chinese Foreign Ministry spokesman Lu Kang said at a daily news briefing.
The US Chamber of Commerce has spoken out against the tariffs, saying the escalating global trade war will hurt American consumers in the long run. It’s unclear when the effects will directly hit American consumers, but there will likely be some delay as inventory is sold off and the trickle-down effects of tariffs on intermediary goods take hold.
The European Union and China will meet for an economic summit in Beijing on July 16 and 17. China is pushing for joint action against the U.S. and WTO, though the EU has been reluctant to speak out so directly.