On the eve of President Donald Trump’s self-declared trade war with China, the world is waiting to see if he will blink. On Friday, July 6, Trump is prepared to impose $50 billion in tariffs against Chinese imports to the U.S., despite full lack of approval from his own party’s leadership. He plans to impose $34 billion in tariffs now, and $16 billion more later. Over the past three decades, the power to impose tariffs has slowly shifted from Congress to the executive branch, particularly if a current trade practice poses a national security threat to the U.S. Trump has decided that the current trade agreement with China is, in fact, such a threat.
China stated earlier in the week that they would not strike first, but would rather only react if the U.S. does impose new tariffs against them. They have stated they are open to talking, but so far Trump has shown no interest in new negotiations. As reported by the Washington Post, Chinese Foreign Ministry spokesman Lu Kang spoke with reporters on Wednesday.
“As long as the U.S. side rolls out its tariffs list, China will respond with all necessary measures to firmly safeguard our legitimate rights and interests.”
China plans to hit the American heartland with the bulk of their retaliatory tariffs, targeting soybeans, poultry, pork, fish, dairy products, nuts, vegetables, corn, and autos. They have also stated that should the U.S. impose more tariffs on top of the currently threatened $50 billion, they are prepared to match those as well. It is about more than just tariffs, however. U.S. businesses in China are reporting a spike in the number of inspections of U.S. goods arriving at ports. An increase in the number of shipments being held up in customs indefinitely, the amount of fines imposed on goods being shipped to China, and the number of shipments that could be denied entry entirely are all potential threats business analysts are warning could take place if Trump insists on moving forward with his trade war.
Chinese companies are taking steps to offset the cost of doing business with the U.S. should the new tariffs be imposed. Bloomberg recently reported that some companies are already planning to cancel soybean orders from the U.S. effective August 31. Others are trying to negotiate deals with their U.S. suppliers to lower their prices to absorb some of the impacts of the 25 percent tariff hike. Several companies are reportedly looking to divert goods to other nations, and some are seeking new suppliers outside of the U.S.
The U.S. Chamber of Commerce, General Motors, Finance Committee Chair Orrin Hatch (R-UT), Sen. Pat Roberts (R-KS), and numerous others have all voiced their displeasure over Trump’s threats to start a trade war with China, but all their talk is apparently falling on deaf ears as Trump continues to indicate he will not back down.