China’s Ministry of Commerce announced measures countering US tariffs. But first thing first. The measures announced are in response to Trump’s steel and aluminum tariffs, not the USD 50b section 301 tariffs announced overnight. China also said it could take legal action regarding the steel tariffs under WTO rules. So far, it appears that China is trying to play by the book.
The MOFCOM proposed a list of 128 US imports with total value at over USD 3b in 2017. A 15% tariff will be imposed on the first group including wines, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol, and ginseng. Then a 25% tariff could be imposed on the second group, including pork and recycled aluminium goods if both sides failed to reach a resolution through talks.
Here is the statement (in simplified Chinese if you’re interested).
Some analysts try to compare US tariffs on USD 50b of China import, and China tariff on USD 3b of American imports. But that is wrong. We’ll repeat here that the MOFCOM’s announcement was in response to the steel and aluminum tariff. And, depending on the data source, China was either the 10th or 11th largest steel importer to the US, contributing to less than 3%.
That is, China hasn’t showed their hands regarding yesterday’s announcement by Trump yet.
