The Trump administration today announced it is levying new tariffs on $200 billion worth of Chinese goods, escalating a trade war between the two countries that has hit the U.S. agriculture sector especially hard thanks to Chinese retaliation.

The U.S. first hit China with “section 301” tariffs on $50 billion worth of its products in July after months of failed negotiations to persuade China to stop appropriating U.S. intellectual property. China was quick to retaliate, putting a 25 percent import tax on soybeans, corn, wheat, sorghum, pork, beef, fruits, vegetables and tree nuts.

The new U.S. tariffs will go into effect Sept. 24. They will first be set at 10 percent and then rise to 25 percent after Dec. 31 if the two countries have not settled their differences by then. China, meanwhile, has already warned that it will retaliate.

“China has had many, many opportunities to change those practices … but up to this point thay have remained obstinate,” a senior administration official told reporters.

On Aug. 3, China threatened to hit U.S. goods with $60 billion in new or higher tariffs – a bump in the rate on some existing tariffs and some new import taxes - if President Donald Trump followed through with a threat to increase U.S. tariffs on an additional $200 billion worth of Chinese goods. Trump made good on that threat today and he has warned there could be more tariffs to follow.

“China has vowed to definitely take countermeasures if the tariff hikes take effect,” said China Daily today, a government-controlled news outlet.

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As to U.S. and Chinese efforts to work out a deal to end the trade war, senior administration officials were not optimistic. So far, China has not been willing to “seriously engage” with U.S. negotiators, one official said. “We’ve been clear that we need systemic changes … “

Trump was more optimistic, though.

“China is now paying us billions of dollars, and we will see how that all works out,” Trump said today. “I think it's going to work out very well with China. I think they want to make a deal. They do want to make a deal - that I can tell you.  They want to make a deal.” 

But some are taking issue with Trump’s claim that China will be pressured into a deal because it’s having to pay billions of dollars to the U.S. in tariffs. In reality, it’s U.S. importers who are paying those tariffs.

“These tariffs are going to be paid for by the working families who drive our economy,” says Jonathan Gold, a spokesman for the group Tariffs Hurt the Heartland. “Tariffs are taxes, plain and simple. By choosing to unilaterally raise taxes on Americans, the cost of running a farm, factory or business will grow. In many cases, these costs will be passed on to American families.”

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