A China’s former trade negotiator has raised questions about the country’s plan in the trade war with the US. According to Long Yongtu, this could lead into a policy disagreement in China.
Long Yongtu, who participated in China’s entry to the World Trade Organization, believes that the government made an error by immediately retaliating against US tariffs.
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Namely, after the US 25% tariffs on USD 50 billion worth of Chinese goods, the latter imposed 25% tariffs on soybeans from the US, in addition to other goods as well. This was considered as an attack on US’s agricultural base.
Specifically, US laid out a list of more than 800 strategically important imports from China that would be subject to a 25% tariff starting from 6 July.
China did not hold back, and decided to retaliate. Specifically, the Chinese news agency Xinhua said China would impose 25% tariffs on 659 US products, ranging from soybeans and autos to seafood.
This action seemed to have triggered more measures from the US, as on June 18 Mr. Trump directed the US Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10%.
What is more, the EU also announced tariffs on US goods. These entered into force on 22 June 2018 and target US exports from cereals and steel products, to politically sensitive goods such as Bourbon and motorcycles.
In 2017, 1.24 million tonnes of the targeted dry bulk goods were exported to the EU from the US, while agricultural products were the largest part of this trade at 1 million tonnes.
Commenting on the trade war, BIMCO notes that the dry bulk shipping industry has already been affected by these tariffs and will be further affected when more tariffs come into force during July. However, the impact on the dry bulk shipping industry in terms of volumes remains limited.
