US firms fear retaliation to Donald Trump’s tariffs will be ‘final nail in the coffin’ for exports to China
- US Dairy Council fears for the future of its access to the huge consumer market with Beijing expected to respond to the anticipated new 25 per cent rate on Friday
- Exporters of blueberry, whiskey and wine also say that Beijing’s retaliation would put a dampener on their business, which is already reeling from previous tariffs
As the United States prepares to increase tariffs on US$200 billion of Chinese goods to 25 per cent from Friday, American companies are fearful China’s retaliation will kill off their exports to the world’s biggest consumer market.
The US government confirmed the tariff increase from 10 per cent to 25 per cent by filing a notice with the Federal Register, the official portal for public policy updates, with Beijing saying it “will have no choice but to implement countermeasures”.
Jaime Castaneda, senior vice-president of the US Dairy Council, said much of his industry was already hit with a 25 per cent tariff by China last year, which caused total dairy exports from the US to China to plunge by 48 per cent in 2018.
Any increase on import restrictions would be “a final nail in the coffin for our exports”, Castaneda said. “If [US] President [Donald] Trump raises tariffs again, we don’t know exactly what China is going to do. We hope that they don’t retaliate. If they retaliate, of course, we hope that it’s not going to be on all dairy products.”
China is expected to retaliate almost immediately, with Beijing reported to be preparing to unleash countermeasures to the US escalation, which were first announced in a series of tweets by Trump on Sunday.
While China has less margin to levy additional tariffs on US goods due to the fact that it buys far less from America than America buys from China, it could raise the rate of existing tariffs. China could also make life more difficult for American companies by ordering Chinese buyers to cease or scale back purchases of certain goods, analysts have suggested.
At an event in Hong Kong on Thursday, a series of US companies spoke of their fear of reprisals from China and how an escalation will compound an already difficult situation.