China has wasted no time in firing back after President Donald Trump’s salvo against its high-tech products.
The world’s second-biggest economy has retaliated with its own package of tariffs on around $50 billion of U.S. imports.
China will levy 25 percent tariffs on imports of 106 U.S. products, with U.S. farmers, plane- and automakers likely to bear the brunt.
That’s in response to 1,300 Chinese products that might be subjected to 25 percent tariffs from the U.S. Here are some of the winners and losers.
Loser: America’s Midwest Farmers
The tariffs are a huge blow to American growers, especially those in Midwestern states that Trump needs to win re-election in 2020. China is the biggest buyer of U.S. soybeans, picking up about a third of the entire U.S. crop. The trade is worth about $14 billion. Soybean prices dropped as much as 5.3 percent in Chicago trading, the most since July 2016.
Winner: South American Growers
Brazil and Argentina are the main competitors to U.S. growers in the market for soybeans and corn. They’ll be eager to pick up any lost business, but they won’t be able to completely replace U.S. trade. Argentina’s crop has been hurt this year by drought, so the country won’t be able to sell as much.
Loser: U.S. Automakers (including Tesla)
China, which imported 36,000 vehicles from the U.S. in the first two months of the year, also plans to slap tariffs on most vehicles, including electric cars. Tesla Inc. is at particular risk as it relies on American-made vehicles for all its Chinese sales. Other U.S. carmakers such as General Motors Co. and Ford Motor Co. manufacture in China.
China’s tariffs could hurt sales of some of Boeing Co.’s best-selling planes, such as the 737 family of passenger jets and put the company at a disadvantage to Airbus SE. China is a crucial market for Boeing. More than 50 percent of the commercial jetliners operating in China are Boeing airplanes.
Winner: U.S. Metalworks
The latest round of proposed tariffs target several specific categories of steel and aluminum made in China. That’s on top of duties announced last month, meaning that some forms of those products will face a 50 percent fee to reach the U.S., further boosting prices for some products.
Loser: Generic Drugmakers
Companies such as Mylan NV face having to pay more for raw ingredients, such as insulin used by diabetics and the anti-allergic-reaction drug epinephrine. Other products such as vaccines and antidepressants are on the list of goods that will be hit by tariffs.
Loser: Chinese BBQ
China is by far the world’s biggest buyer of soybeans, which are mostly crushed and fed to pigs. The tariffs on U.S. soybeans could ultimately drive up costs for Chinese pig farmers and meat prices for 1.3 billion citizens.
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