China to impose extra tariffs of 10%-15% on various US products

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(Reuters) – China on Tuesday swiftly retaliated against fresh U.S. tariffs, announcing 10%-15% hikes to import levies covering a range of American agricultural and food products, and placing twenty-five U.S. firms under export and investment restrictions.

COMMENTS:

LIU JINLU, AGRICULTURAL RESEARCHER AT GUOYUAN FUTURES, BEIJING

“This news has raised concerns about tightening domestic agricultural supplies, benefiting the sector. China’s 10% tariff on U.S. soybeans will increase costs and reduce U.S. imports, leading China to boost imports from Brazil and other countries.

“However, South America, especially Brazil, is approaching its soybean export limit after years of growth (2024 exports are expected at 96 million tons). Currently in the harvest season, Brazilian soybeans have not yet arrived in large quantities at Chinese ports but are expected in Q2. With the additional U.S. tariffs, the already tight soybean stock will become even more strained.”

GENEVIEVE DONNELLON-MAY, RESEARCHER AT OXFORD GLOBAL SOCIETY, MELBOURNE

“While the new tariff announcement is not as heavy as the 25% in 2018, it does target many of the same agricultural products. In addition, the 10% tariff may provide Beijing with the opportunity to increase the tariffs on U.S. agricultural goods by another 10% or even 20% in the coming months and years.

“Soybeans were considered a weak link during the first Trump administration but Chinese policymakers have learned lessons from that time and are, in theory, much better prepared, due in part to Beijing’s food import diversification strategy.”

WANG ZHUO, PARTNER AT HEDGE FUND ZHUOZHU INVEST, SHANGHAI

Raising tariff on China “will likely hurt the U.S. itself as it needs cheap Chinese products to bring down inflation. Higher tariffs on U.S. agriculture products will also negatively impact China”, but countermeasures are politically necessary. “So, it would be wise to make some symbolic move without triggering an escalation in tensions.”

DENNIS VOZNESENSKI, ANALYST, COMMONWEALTH BANK, SYDNEY

“Chinese tariffs on U.S. wheat and corn imports should be supportive for demand for Australian wheat and barley exports. However, China’s recent slowdown in imports of feed grains from all origins should temper the excitement.”

WAN CHENGZHI, ANALYST, CAPITAL JINGDU FUTURES, DALIAN CITY

“Considering that China’s peak import period for U.S. soybeans has already passed, the impact of these countermeasures on the total volume of U.S. soybean imports is limited. Any price increases in the future are likely to be more of an emotional market response.”