President Donald Trump, left, shakes hands with China's President Xi Jinping during a meeting on the sidelines of the G-20 summit in Osaka, Japan, June 29, 2019. (Susan Walsh/AP)
BEIJING — Chinese tariffs on a wide array of U.S. agricultural products were set to take effect Monday as Beijing remains defiant in the face of U.S. pressure — at the same time as urging Washington to come to the negotiating table.
China’s retaliation, its response to President Donald Trump’s decision to raise tariffs on all Chinese goods to at least 20 percent, is the latest escalation in a brewing trade battle between the world’s two largest economies.
Beijing last week said it would impose tariffs of up to 15 percent on a raft of U.S. farm products from March 10, targeting some of the United States’ most important exports to China.
China is the largest market for American farm products, last year importing almost $20 billion in soybeans, corn, cotton and the other U.S. farm products that will be subject to the new tariffs, according to data from the U.S. Department of Agriculture.
The measures were in retaliation for Trump’s decision earlier this month to increase tariffs on Chinese products by another 10 percent, on top of the 10 percent imposed last month, bringing the total duty on some Chinese products to 45 percent. Beijing also placed export controls and trade restrictions on more than 20 U.S. companies.
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Trump has also been threatening to impose tariffs on Canada and Mexico, but last week postponed his plans for another month after talks with the leaders of those countries.
Although top Trump administration officials, including Treasury Secretary Scott Bessent and Secretary of State Marco Rubio, have had calls with their Chinese counterparts, the president has had no such conversation with his Chinese counterpart, Xi Jinping.
China’s leaders have instead remained defiant in the face of ever higher tariffs, despite a slowing economy and falling prices.
In addition to weak spending and high unemployment, China is experiencing stubborn deflation. Data on Sunday showed consumer prices dropped further in February, falling 0.7 percent from a year earlier.
But China has relatively few cards to play given that it runs an enormous trade surplus — approaching $300 billion last year — with the United States.
Beijing has instead retaliated with a variety of novel measures. The retaliatory package by Chinese authorities last week included moves to restrict imports of gene sequencing technology from American biotech company Illumina and an investigation into whether an American fiber optics company was skirting Beijing’s earlier anti-dumping measures.
China has, however, also signaled it is open to negotiations with the Trump administration. On the same day as hitting back against tariffs, Chinese authorities released a white paper claiming that its law enforcement agencies were cracking down on the production and shipment of fentanyl-related substances.
China’s top diplomat, Wang Yi, on Friday illustrated this carrot-and-stick approach, striking a defiant tone while also calling on Trump to reconsider the trade war.
“No country can fantasize that it can suppress and contain China while developing good relations with China,” Wang said at a news conference in Beijing.
“China and the United States have extensive common interests and broad space for cooperation. They can become partners, achieve mutual success and prosper together,” he added.