Beijing rolled out countermeasures on Tuesday in response to the additional 10 percent tariff the United States arbitrarily imposed on Chinese goods that day.
Apart from putting some US companies on its unreliable entity list, citing national sovereignty, security and development concerns, Beijing has taken aim at a variety of US agricultural produce this time. Its previous retaliatory tariffs were mainly restricted to certain US industrial products. Starting from Monday next week, China will impose an additional 15 percent tariff on chicken, wheat, corn and cotton originating from the US; and another 10 percent tariff on US sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products. It has also launched an anti-circumvention investigation into imported fiber optic products originating from the US.
China is also suing the US for its latest tariff increase under the World Trade Organization dispute settlement mechanism, as the unilateral tariff measures are not only unjust but seriously violate WTO rules and undermine the basis for bilateral economic and trade cooperation.
Although agricultural produce is only one of the major US exports to China, the number of jobs it supports in the US is even more than those supported by its industrial and energy exports to China combined.
China is the largest market for US agricultural exports, accounting for about 20 percent of the total, followed by Mexico and Canada. In contrast, thanks to its diversification strategy in recent years, China has promoted robust agricultural trade relations with other major agricultural exporters including Brazil, the European Union, Argentina, Australia, Canada, Russia and Ukraine. The US now accounts for about 15 percent of China's agricultural imports.
The Trump administration should be spurred by Beijing's latest move to reflect on the fact that what it has done with regard to China-related economic and trade issues over the past month or so has already prompted the Chinese side to doubt its good faith in saying Sino-US relations stand at a new beginning.
The US administration has claimed that the double tariff hike is because China has not taken adequate steps to alleviate the illicit drug crisis through cooperative enforcement actions.
But as the US itself has acknowledged, China has demonstrated a strong commitment to joint counternarcotics efforts, in policy formulation and implementation, and the collaboration between China and the US in combating narcotics has produced significant results. That is also detailed in a white paper on the issue Beijing released on Tuesday. The recent decision by the US to impose tariffs on Chinese exports under the pretext of the fentanyl issue represents a step backward, undermining the spirit of cooperation and mutual benefit that has characterized the bilateral counternarcotics efforts.
By targeting US agricultural imports, Beijing intends to awaken the Trump administration to the historically proven truth there are no winners in trade wars. The countermeasures both Canada and Mexico have taken in response to the US' tariff attacks on them are also expected to serve to drive home that message to the administration.
The US' coercive and bullying moves should also prompt the two countries to realize that snuffing out others' candles does not bring light to oneself, as Chinese Foreign Ministry spokesperson Lin Jian said. The two countries have previously proposed to the Trump administration that they should target China together with the US in exchange for the US administration showing them tariff lenience.
"The Chinese people never accept bullying. Pressure, coercion and threats are not the right way to deal with China", said Lin. "Exerting extreme pressure on China is the wrong target and the wrong calculation."
"If the US really wants to resolve the fentanyl issue, it should consult with China on the basis of equality, respect and mutual benefit to resolve each other's concerns. If the US has other intentions and insists on launching a tariff war, trade war or any other war, China will fight to the end," Lin added.
As before, Beijing announced its retaliatory tariffs about one week before they are due to take effect, leaving a window of opportunity for the two sides to take advantage of multiple dialogue and exchange channels to reach an agreement. The US should view and handle issues in an objective and rational manner and return to the right track of properly resolving differences through equal dialogue as soon as possible, as China's Commerce Ministry has urged.
Weaponizing tariffs or bending rules is not dealmaking, it is extortion and blackmail. Such practices epitomize the bullying that characterizes "America First".
