In response to President Donald Trump's announced tariffs on imported aluminum and steel, China has announced $50 billion in retaliatory tariffs, most notably on soybean exports from the United States. It's a move aimed directly at the heart of Trump country, and the effects could easily spiral into economic disaster.
The tariffs on American soybeans are part of China's $50 billion trade penalties in response to the tariffs enacted by Trump last month. Soybeans are the largest American export to China, receiving 61.4 percent of U.S. soybean exports exceeding $14 billion annually.
But the latest move by China is more than just an economic tit-for-tat with the administration. Tariffs on soybeans directly target the heart of Trump country. Eight of the ten biggest soybean producing states voted for Trump in the 2016 election.
Andy Kiersz/Business Insider
Top Republicans have warned Trump that agriculture would be the first major target of retaliatory tariffs on U.S. exports.
"Every time you do this, you get a retaliation, and agriculture is the No. 1 target," Senator Pat Roberts (R-KS) said last month. "I think this is terribly counterproductive for the [agriculture] economy." Roberts is the chairman of the Senate Agricultural Committee. His state, Kansas, is the tenth largest producer of soybeans in the country.
USDA Secretary Sonny Purdue vowed to keep farmers out of the crosshairs of a trade war, though how exactly this would be accomplished remains unclear. And while the tariffs are not expected to have a huge impact on the entire economy, the threat of an escalating trade war has Wall Street and Main Street concerned.
"I talked to the President as recently as last night," Perdue said. "And he said, 'Sonny, you can assure your farmers out there that we're not going to allow them to be the casualties if this trade dispute escalates. We're going to take care of our American farmers. You can tell them that directly."
Tariffs on soybeans are not the only penalty China is imposing on American exporters.
China's $50 billion in tariffs includes 106 U.S.-made products, most of which are produced in Trump country. Two other major exports included are cars and whiskey.
Despite his confidence that tariffs will help to close the trade deficit with China, much of the opposition to the policies have been bipartisan, as The Washington Post noted on Wednesday
Former Senator Max Baucus, who co-chairs Farmers for Free Trade, said the Chinese tariffs will hurt “harvesters, processors, truck drivers, rail workers, and main street businesses that rely on a strong agricultural economy” along with farmers.
“We urge the administration to reconsider escalating this trade war,” said Baucus, who served as President Obama’s U.S. ambassador to China.
The full list of the products targeted by China is below:
- Yellow soybean
- Black soybean
- Corn
- Cornflour
- Uncombed cotton
- Cotton linters
- Sorghum
- Brewing or distilling dregs and waste
- Other durum wheat
- Other wheat and mixed wheat
- Whole and half head fresh and cold beef
- Fresh and cold beef with bones
- Fresh and cold boneless beef
- Frozen beef with bones
- Frozen boneless beef
- Frozen boneless meat
- Other frozen beef chops
- Dried cranberries
- Frozen orange juice
- Non-frozen orange juice
- Whiskies
- Unstemmed flue-cured tobacco
- Other unstemmed tobacco
- Flue-cured tobacco partially or totally removed
- Partially or totally deterred tobacco stems
- Tobacco waste
- Tobacco cigars
- Tobacco cigarettes
- Cigars and cigarettes, tobacco substitutes
- Hookah tobacco
- Other tobacco for smoking
- Reconstituted tobacco
- Other tobacco and tobacco substitute products
- SUVs with discharge capacity of 2.5L to 3L
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2500ml, but not exceeding 3000ml for SUVs (4 wheel drive)
- Vehicles with discharge capacity of 1.5L to 2L
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 1000ml, but not exceeding 1500ml for SUVs (4 wheel drive)
- Passenger cars with discharge capacity 1.5L to 2L, 9 seats or less
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 1000ml, but not exceeding 1500ml for 9 passenger cars and below
- Passenger cars with discharge capacity of 3L to 4L, 9 seats or less
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 3000ml, but not exceeding 4000ml for 9 passenger cars and below
- Off-road vehicles with discharge capacity of 2L to 2.5L
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2000ml, but not exceeding 2500ml for off-road vehicles
- Passenger cars with discharge capacity of 2L to 2.5L, 9 seats or less
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2000ml, but not exceeding 2500ml for 9 passenger cars and below
- Off-road vehicles with discharge capacity of 3L to 4L
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 3000ml, but not exceeding 4000ml for off-road vehicles
- Diesel-powered off-road vehicles with discharge capacity of 2.5L to 3L
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2500ml, but not exceeding 3000ml for diesel-powered off-road vehicles
- Passenger cars with discharge capacity of 2.5L to 3L, 9 seats or less
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2500ml, but not exceeding 3000ml for 9 passenger cars and below
- Off-road vehicles with discharge capacity of less than 4L
- Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement not exceeding 4000ml for off-road vehicles
- Other vehicles which are equipped with an ignited reciprocating piston internal combustion engine and a drive motor and can be charged by plugging in an external power source
- Other vehicles that are equipped with a compression ignition type internal combustion engine (diesel or semi-diesel) and a drive motor, other than vehicles that can be charged by plugging in an external power source
- Other vehicles which are equipped with an ignition reciprocating piston internal combustion engine and a drive motor and can be charged by plugging in an external power source
- Other vehicles that are equipped with a compression-ignition reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source
- Other vehicles that only drive the motor
- Other vehicles
- Other gasoline trucks of less than 5 tons
- Transmissions and parts for motor vehicles not classified
- Liquefied Propane
- Primary Shaped Polycarbonate
- Supported catalysts with noble metals and their compounds as actives
- Diagnostic or experimental reagents attached to backings, except for goods of tariff lines 32.02, 32.06
- Chemical products and preparations for the chemical industry and related industries, not elsewhere specified
- Products containing PFOS and its salts, perfluorooctanyl sulfonamide or perfluorooctane sulfonyl chloride in note 3 of this chapter
- Items listed in note 3 of this chapter containing four, five, six, seven or octabromodiphenyl ethers
- Contains 1,2,3,4,5,6-HCH (6,6,6) (ISO), including lindane (ISO, INN)
- Primarily made of dimethyl (5-ethyl-2-methyl-2oxo-1,3,2-dioxaphosphorin-5-yl)methylphosphonate and double [(5-b Mixtures and products of 2-methyl-2-oxo-1,3,2-dioxaphosphorin-5-yl)methyl] methylphosphonate (FRC-1)
- 38248600a articles listed in note 3 to this chapter containing PeCB (ISO) or Hexachlorobenzene (ISO)
- Containing aldrin (ISO), toxaphene (ISO), chlordane (ISO), chlordecone (ISO), DDT (ISO) [Diptrix (INN), 1,1,1-trichloro-2 ,2-Bis(4-chlorophenyl)ethane], Dieldrin (ISO, INN), Endosulfan (ISO), Endrin (ISO), Heptachlor (ISO) or Mirex (ISO). The goods listed in note 3 of this chapter
- Other carrier catalysts
- Other polyesters
- Reaction initiators, accelerators not elsewhere specified
- Polyethylene with a primary shape specific gravity of less than 0.94
- Acrylonitrile
- Lubricants (without petroleum or oil extracted from bituminous minerals)
- Diagnostic or experimental formulation reagents, whether or not attached to backings, other than those of heading 32.02, 32.06
- Lubricant additives for oils not containing petroleum or extracted from bituminous minerals
- Primary Shaped Epoxy Resin
- Polyethylene Terephthalate Plate Film Foil Strips
- Other self-adhesive plastic plates, sheets, films and other materials
- Other plastic non-foam plastic sheets
- Other plastic products
- Other primary vinyl polymers
- Other ethylene-α-olefin copolymers, specific gravity less than 0.94
- Other primary shapes of acrylic polymers
- Other primary shapes of pure polyvinyl chloride
- Polysiloxane in primary shape
- Other primary polysulphides, polysulfones and other tariff numbers as set forth in note 3 to chapter 39 are not listed.
- Plastic plates, sheets, films, foils and strips, not elsewhere specified
- 1,2-Dichloroethane (ISO)
- Halogenated butyl rubber sheets, strips
- Other heterocyclic compounds
- Adhesives based on other rubber or plastics
- Polyamide-6,6 slices
- Other primary-shaped polyethers
- Primary Shaped, Unplasticized Cellulose Acetate
- Aromatic polyamides and their copolymers
- Semi-aromatic polyamides and their copolymers
- Other polyamides of primary shape
- Other vinyl polymer plates, sheets, strips
- Non-ionic organic surfactants
- Lubricants (containing oil or oil extracted from bituminous minerals and less than 70% by weight)
- Aircraft and other aircraft with an empty weight of more than 15,000kg but not exceeding 45,000kg