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Beijing will impose tariffs on a slew of US farm products as part of its countermeasures against Washington, threatening to disrupt a key portion of trade between two agricultural powerhouses.
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While the overall list of measures from China was contained, the broad nature of the farming moves was unexpected, touching commodities from beef to corn and soybeans. China had warned, through the state-owned Global Times, that agricultural products would be caught in the crossfire as it responds to US President Donald Trump.
Beijing said on Tuesday that it would add 10% duties on American soybean shipments from March 10, the country’s state council announced. Sorghum, pork, and beef will also incur additional 10% tariffs, while Beijing will impose extra 15% levies on US chicken, wheat, corn and cotton, according to a statement published on the website of the Ministry of Finance.
The measures encompass some of the biggest US agriculture exports to China, and come as many American farmers are just weeks away from planting crops for the upcoming season. China is the world’s biggest importer of soybeans, which are crushed into cooking oil and used to feed its massive herd of pigs.
Futures for soybeans, particularly crucial given the scale of Chinese imports, were down about 0.3% as of 1:40 p.m. in Beijing, after touching the lowest in nearly two months. Cotton futures in New York fell to the lowest in more than four years. Corn and wheat were little changed.
“China will be able to reach a new supply demand balance, by, for example, importing more soybeans from South America, or releasing supplies from the reserves,” said Hanver Li, chief analyst with Shanghai JC Intelligence Co. “China had been making preparations long ago. China is ready for this.”
Asia’s largest economy has sought to diversify suppliers since the last trade war with the US, cushioning the impact of the measures announced on Tuesday.
Agricultural markets were caught in the crosshairs of the China-US trade war during Trump’s first presidential term, causing sales of American soybeans to drop nearly 80% over a two-year period. Since then, China has taken steps to purchase more from nations including Brazil.