After China unveiled steep retaliatory tariffs on American exports on Wednesday, Treasury Secretary Scott Bessent issued a pointy and considerably stunning response: “So what?”
The query underscored the Trump administration’s argument that America has the higher hand in a commerce conflict with China given how reliant its financial system is on exports to america.
The US buys way more items from China than China buys from america. However Beijing’s determination to retaliate towards President Trump’s punishing tariffs by elevating levies on American imports to 84 p.c may sting greater than Mr. Bessent let on.
“American corporations which were promoting to China, and have been enormously profitable doing that, aren’t going to have the ability to try this due to Chinese language retaliation,” Sean Stein, the president of the U.S.-China Enterprise Council, mentioned within the hours earlier than Mr. Trump ratcheted up his tariffs once more.
“Tariffs on the Chinese language aspect and the U.S. aspect cowl the whole lot,” Mr. Stein added, which means the whole lot from aviation to medical imaging to agriculture can be affected and “commerce goes to sluggish,” he mentioned.
The lack of China as an export market will deal a very exhausting financial blow to agricultural employees in lots of pink states, hitting most of the voters who helped Mr. Trump win the presidential election. On Wednesday, Mr. Trump ratcheted U.S. tariffs on China even larger as he initiated a pause on “reciprocal” tariffs that he had imposed on different nations. The reprieve provides little reduction for farmers who’re involved {that a} protracted commerce conflict with China will lower off ties with their largest export market.
The soybean business is without doubt one of the sectors most involved about tariff retaliation. China is America’s largest soybean export market, however when Mr. Trump imposed tariffs on Chinese language items throughout his first time period, Beijing retaliated by shopping for soybeans from different nations, together with Brazil.
“If this lasts long run, we’re going to have a big variety of farmers going out of enterprise,” mentioned Caleb Ragland, a Kentucky farmer who’s president of the American Soybean Affiliation. “We nonetheless bear scars from the final commerce conflict.”
The American Soybean Affiliation has been urging the Trump administration to strike a brand new commerce cope with China to keep away from a long run commerce conflict.
U.S. corn farmers, who promote about 2 p.c of their merchandise to China, have additionally been on edge in regards to the commerce battle. They welcomed Mr. Trump’s determination to pause punishing tariffs on different nations that would have led to extra retaliation on farmers and different American companies. However they urged the Trump administration to concentrate on negotiations that open up market entry.
“The longer that uncertainly exists, the extra involved we develop into that our growers may harvest billions of bushels of corn for which they won’t have dependable markets,” mentioned Kenneth Hartman Jr., president of the Nationwide Corn Growers Affiliation. “Our farmers need certainty that our prospects at dwelling and overseas will purchase our merchandise within the months and years forward.”
Anxiousness over the affect of the tariffs was evident on Wednesday as Jamieson Greer, the U.S. commerce consultant, testified earlier than the Home Methods and Means Committee and confronted questions from Republicans who have been nervous about different nations retaliating towards U.S. farm exports.
Consultant Darin LaHood, a Republican from Illinois, mentioned that he appreciated what Mr. Trump was doing to handle longstanding commerce boundaries, however that his constituents have been involved.
“As I discuss to my farmers, there’s numerous nervousness, numerous stress, numerous uncertainty, as a result of after we get right into a commerce conflict, often the primary pawn within the commerce conflict is agriculture,” he mentioned.
Mr. Greer responded that “virtually all nations have introduced that they’re not going to retaliate” aside from China. Indonesia, India and lots of different nations “have affirmatively mentioned we’re not retaliating,” he added, whereas some nations, like Vietnam, have unilaterally provided to decrease tariffs on U.S. farm merchandise. Mr. Greer didn’t point out that Europe introduced retaliatory measures on Wednesday or that Canada had retaliated towards earlier rounds of tariffs.
Mr. Bessent downplayed the affect of China’s response on Wednesday morning, arguing on the Fox Enterprise Community that america exports comparatively little to China.
“China can increase their tariffs, however so what?” mentioned Mr. Bessent, who owns as a lot as $25 million of North Dakota farmland that he should divest.
The retaliation may pressure the Trump administration to revive the bailouts to American farmers that have been provided throughout the president’s first time period.
Brooke Rollins, the agriculture secretary, mentioned on Wednesday that such a reduction package deal was being thought of and that “the whole lot is on the desk.”
Requested on Thursday in regards to the potential for a cope with China, Mr. Trump mentioned he anticipated that “we’ll find yourself understanding one thing that’s superb for each nations.”
Farmers usually resist authorities handouts, however Mr. Ragland mentioned that federal reduction could be crucial on this case.
“If we proceed for use as a negotiating software, and we’re going to be a sacrificial lamb on behalf of the larger image, we’re going to should have an financial package deal to assist us hold the lights on,” he mentioned.
Tony Romm contributed reporting
