President Trump on Monday announced plans to identify $200 billion in additional Chinese goods to be subject to a 10% tariff. China is expected to retaliate soon in a similar fashion.
“What we can expect is what we’ve seen in the recent past. China will likely respond, if you will, in a proportional manner. If you look back, the idea is that for each step that we’ve made in this trade dispute, China has responded in a very similar fashion, trying to target the same dollar value of goods and services. I would expect that pattern to continue,” Iowa State University Extension economist Chad Hart said.
White House trade adviser Peter Navarro said President Trump’s decision was in response to China’s imposition of $50 billion in retaliatory tariffs. President Trump hopes to adjust China’s unfair trading practices, specifically in regards to intellectual property rights. He also aims to achieve a more balanced trade portfolio with China. Hart says the U.S. agriculture industry questions the President’s bargaining tactics, but remains hopeful.
“Those long-run goals are worth trying to work for and protect. The question is, ‘At what cost will those come in this stage,’” Hart said. “That’s the issue U.S. Ag is wrestling with right now. It’s a great goal to have, (but) is this the proper time to try to get that and is this the proper cost to go through in order to reach that long-term goal?”
Hart says the only element separating the United States and China from a full-fledged trade war is the implementation of recently threatened tariffs. The United States and China plan to target roughly $34 billion worth of goods with immediate tariffs on July 6. Hart hopes both countries can come together within the next couple weeks to reach an agreement and alleviate trade pressure.
“As we’ve said here, we’re looking at another two to two-and-a-half weeks before a big portion of these tariffs go in place. What that does it (is) it provides another window of opportunity for negotiations to hopefully head, at least, some of these measures off,” Hart said. ”That may be critical, especially for agriculture. If these tariffs do go in here, in July, I think we’ll be hard pressed to get them removed by harvest time.”