The White House confirmed the implementation of additional tariffs on Chinese goods, escalating trade tensions between the United States and China. The new duties, set at 10%, will take effect on Tuesday, marking a significant increase in tariffs over the past month, totaling 20%. In response, China's Ministry of Commerce stated its firm rejection of these new tariffs and announced plans to implement countermeasures.
The state-backed Global Times reported on Monday that Beijing is considering imposing retaliatory tariffs on U.S. agricultural products. This move follows China's previous retaliatory actions, which included raising duties on certain U.S. energy imports and placing two U.S. companies on an unreliable entities list, potentially restricting their business activities in China.
U.S. exports to China are substantial, with agricultural products like soybeans accounting for the largest share at 1.2%, or $22.3 billion, as of 2023. Oil and gas exports rank second at 1%, or $19.3 billion, while pharmaceuticals hold the third spot at 0.8%, or $15.6 billion.
On the same day the tariffs take effect, China is also launching its annual parliamentary meeting known as the "Two Sessions." During this event, policymakers are expected to unveil the annual gross domestic product target and fiscal stimulus plans for the year. The Ministry of Commerce expressed concerns that the new U.S. duties would damage U.S.-China trade relations and urged Washington to withdraw them.
According to Nomura's Chief China economist Ting Lu, the average effective U.S. tariff rate on Chinese goods is projected to rise to 33%, a significant increase from around 13% before President Donald Trump began his latest term in office this January. Beijing has consistently warned of potential countermeasures but has yet to provide specific details on its planned actions.