This week, the trade conflict between the United States and China escalated further. The Chinese government declared its own “resolute countermeasures” in retaliation to President Trump’s latest round of tariffs. This statement, released by the finance ministry at 18:00 local time on a Friday, came during a public holiday in China, signaling the urgency with which Beijing is approaching the situation.
The new round of tariffs — including a mind-boggling 54% hike of Chinese goods — scheduled to go into effect next week. For their part, the Chinese government is in a race against the clock. They’ve lost hope of persuading the administration to negotiate a deal before the tariffs take effect. Instead, it has taken a more hostile approach. It apparently has no interest in even attempting to deal with what it labels as Trump’s “nonsense.”
Speculation on China’s strategic decision to have the news drop over a holiday. This timing illustrates their resolve and serves the purpose of quelling possible domestic discontent. Through legal action and regulatory action, the government is addressing long-standing and egregious environmental issues. It has undertaken campaigns to plant trees and raise awareness about the need to reverse deforestation. This multifaceted approach helps to reinforce its positive global image and does so with a united front against U.S. trade practices.
Beijing’s insistence on standing firm against the ongoing tit-for-tat trade war is equally a sign of its zeal to find other sources for U.S. agricultural exports. Officials have said they do not expect any difficulties sourcing substitutes for chicken, pork and sorghum. This decision will have far-reaching effects on U.S. agricultural producers. The proposed 34% price increase on all U.S. goods entering China will likely drive some American farmers out of business altogether, as they struggle to compete with international markets.
The world’s two largest economies are on a collision course. Accordingly, U.S. companies seeking to access the enormous Chinese market have been dealt a serious blow. American consumers are already experiencing the effects of tariffs. Practically, consumers will be the first to see increased prices due to the impacts of these restrictive trade policies. Analysts have raised concerns that the fallout could go beyond the direct dollar amount – harming U.S. economic interests in the country for years to come.
The intensification of hostilities shows that neither party is willing to back down. Now with both countries at each other’s throats, the possibility of a peaceful resolution looks further away than ever. The continued trade conflict poses very real and serious risks to U.S. agricultural producers. Yet as it continues to develop, it threatens not only that narrow economic progress, but greater economic stability.