Business

China Threatens Tariffs On 106 US Products, Including Cotton

China responded to President Trump's new tariffs by threatening tariffs of its own on 106 US products, including cotton, soybeans, airplanes, cars, in the latest escalation of what risks becoming a tit-for-tat trade war between the world's two largest economies.

The plan would see China slap 25% levies on a range of US goods worth about US$ 50 billion. Though China said the timing depends on US moves, the news had an immediate impact on global markets.

The Chinese announcement came just a day after the White House unveiled plans for tariffs on US$ 50 billion in Chinese imports across 1,300 categories, with 25% levies on Chinese goods ranging from electronics, aerospace and machinery to phones, shoes and furniture.

At a press conference, Chinese officials did little to stem talk of "war," but stressed that Beijing is willing to work with the White House. "If someone wants a trade war, we will fight to the end. If someone wants to talk, our door is open," said Wang Shouwen, vice-minister of commerce.

Zhu Guangyao, vice minister of finance said both sides were "showing their swords & making demands," but needed to get back to the negotiating table.

Though the dollar amounts targeted by both sides are similar - US$ 50 billion - the focus on US soybean exports by China could have a particularly big impact on the United States. Soybeans and cottton are important US agricultural exports to China and US farmers and their allies fought hard to prevent the tariffs - something Zhu noted in the press conference.

Christopher Balding, an associate professor at the HSBC Business School in Shenzhen, said that comparing the US and Chinese lists showed China's willingness to target products that could create political problems for Trump. "Even though the numbers between China and the US are comparable, it seems clear that China is trying to twist the knife," he said, "This is a warning that 'we are willing to fight harder & inflict more pain that you are.'"

The goal may be to get US voters to stop Trump from doing more. Farm states generally backed Trump in the 2016 election and their exports could be hurt. "China is stirring up US farmers to put pressure on the White House," said Shen Dingli, deputy dean of the Institute of International Affairs at Shanghai's Fudan University.