Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019.
Aly Song | Reuters
BEIJING — China announced Tuesday it would impose additional tariffs of up to 15% on some U.S. goods from March 10 and restrict exports to 15 U.S. companies.
The retaliatory measures from China’s Ministry of Finance and Ministry of Commerce came just as additional U.S. tariffs took effect on Chinese goods.
The additional Chinese tariffs largely cover U.S. agricultural goods, including corn and soybeans, which will be subject to new duties of 15% and 10%, respectively, according to the finance ministry’s website.
Companies affected by the export controls include Leidos and General Dynamics Land Systems, according to the commerce ministry.
China’s relationship with the U.S. is bound to see disagreements, but China will not accept pressuring or threatening, Lou Qinjian, spokesperson for the third session of the 14th National People’s Congress, told reporters Tuesday morning.
The congress is set to kick off an annual meeting on Wednesday.
The White House has confirmed that new duties of 10% on Chinese goods are set to take effect Tuesday, bringing the total amount of new tariffs imposed in just about a month to 20%.
In a statement published earlier in the day, China’s Ministry of Commerce said Beijing “firmly rejects” additional U.S. tariffs on Chinese goods and will take countermeasures.
The duties will “hurt” U.S.-China trade relations and China urges the U.S. to withdraw them, the ministry said in Chinese, translated by CNBC. Beijing has previously warned of countermeasures, but had yet to detail any as of Tuesday morning.
Tariff ‘displeasure’
“Trade wars carry the risk of retaliation and escalation — and certainly in the case of China, and in the case potentially of Canada and Mexico, which also will be facing tariffs today … we would expect some response to come,” Frederique Carrier, head of investment strategy at RBC Wealth Management, told CNBC’s “Capital Connection” on Tuesday.
“A response perhaps that is not tit-for-tat exactly but a targeted response to show the displeasure that these countries are experiencing at getting tariffs,” Carrier said.
After the first round of new U.S. tariffs in February, China’s retaliatory measures included raising duties on certain U.S. energy imports and putting two U.S. companies on an unreliable entities list that could restrict their ability to do business in the Asian country.
The average effective U.S. tariff rate on Chinese goods is thus set to hit 33%, up from around 13% before U.S. President Donald Trump began his latest term in January, according to estimates from Nomura’s Chief China economist Ting Lu.
China’s state-backed Global Times reported Monday, citing a source, that Beijing was considering retaliatory tariffs on U.S. agricultural products.
U.S. exports of agricultural products such as soybeans to China account for the largest share of U.S. goods exported to China at 1.2%, or $22.3 billion, as of 2023, according to Allianz Research analysis.
Oil and gas ranked second by share at 1%, or $19.3 billion, the research showed. Pharmaceuticals ranked third at 0.8% or $15.6 billion.