Hitting back: More pain for firms as China's new tariffs kick in
Tariffs of up to 25 percent on $60bn in US imported goods take effect on Saturday in retaliation for US measures.
by David Ho
19 hours ago
China's latest round of tariffs on $60bn worth of US goods is in retaliation for Washington's move to impose 25 percent tariffs on $200bn worth of Chinese goods
Hong Kong - Vitasoy has been producing its popular malted soymilk in its home base of Hong Kong, as well as Shanghai and Shenzhen on the Chinese mainland, since the 1940s. But the trade war between the United States and China has affected a commodity important to it: soya beans.
And as China's latest retaliatory tariffs against goods from the US come into effect from Saturday, more companies could be finding their main commodities caught in the crossfire.
Soy importers are now looking to source their soya beans elsewhere, resulting in an oversupply of the crop in the US - and in global prices dropping sharply.
The US exported about $14.2bn worth of soya beans to China in 2016, according to the US Census Bureau. Yet that number had dropped to less than $3.2bn by 2018, when the first wave of tit-for-tat tariffs hit. And according to a report by Bloomberg this week, China - the world's biggest consumer of the commodity - has now put all purchases of US soya beans on hold. The outbreak of African swine fever in China has also put a dampener on demand there.
Soya beans are grown in many of the states where US President Donald Trump derives much of his support, potentially giving Beijing an economic weapon with which to defend itself.
Companies like Vitasoy and other soy importers are now looking to source their soya beans elsewhere, resulting in an oversupply of the crop in the US - and in global prices dropping sharply.
"Vitasoy has been adopting [an] agile procurement strategy to diversify the source of raw materials geographically," Stella Lung, a senior public relations manager for Vitasoy International, told Al Jazeera. "Currently, both Hong Kong and mainland China businesses haven't purchased any soybeans from the US," Lung added.
The impact of the trade war on soya beans - and the companies that deal with them - are but one front in a growing dispute between the world's two largest economies. Many other industries, commodities and entire economies are being affected.
Tit-for-tat
On Saturday, Chinese tariffs of up to 25 percent on $60bn in US imported goods take effect.
That's in response to the US move on May 10 to raise tariffs on $200bn worth of Chinese goods from 10 to 25 percent. The Office of the United States Trade Representative will hold a public hearing on June 17 and is considering imposing 25 percent tariffs on another $300bn worth of Chinese imports, including mobile phones and laptops.
US-China trade war
China's latest round of tariffs affect agricultural imports such as soybeans [Reuters]
"The tariff hike China has imposed on $60bn worth of goods, notably agricultural products and liquid natural gas, will likely result in increased business costs for those businesses reliant on inputs imported from the US," Darren Tay, a country risk analyst at macroeconomic intelligence firm Fitch Solutions, told Al Jazeera.
more @ https://www.aljazeera.com/ajimpact/hitting-pain-firms-chinas-tariffs-kick-190531102232746.html
Tariffs of up to 25 percent on $60bn in US imported goods take effect on Saturday in retaliation for US measures.
by David Ho
19 hours ago
China's latest round of tariffs on $60bn worth of US goods is in retaliation for Washington's move to impose 25 percent tariffs on $200bn worth of Chinese goods
Hong Kong - Vitasoy has been producing its popular malted soymilk in its home base of Hong Kong, as well as Shanghai and Shenzhen on the Chinese mainland, since the 1940s. But the trade war between the United States and China has affected a commodity important to it: soya beans.
And as China's latest retaliatory tariffs against goods from the US come into effect from Saturday, more companies could be finding their main commodities caught in the crossfire.
Soy importers are now looking to source their soya beans elsewhere, resulting in an oversupply of the crop in the US - and in global prices dropping sharply.
The US exported about $14.2bn worth of soya beans to China in 2016, according to the US Census Bureau. Yet that number had dropped to less than $3.2bn by 2018, when the first wave of tit-for-tat tariffs hit. And according to a report by Bloomberg this week, China - the world's biggest consumer of the commodity - has now put all purchases of US soya beans on hold. The outbreak of African swine fever in China has also put a dampener on demand there.
Soya beans are grown in many of the states where US President Donald Trump derives much of his support, potentially giving Beijing an economic weapon with which to defend itself.
Companies like Vitasoy and other soy importers are now looking to source their soya beans elsewhere, resulting in an oversupply of the crop in the US - and in global prices dropping sharply.
"Vitasoy has been adopting [an] agile procurement strategy to diversify the source of raw materials geographically," Stella Lung, a senior public relations manager for Vitasoy International, told Al Jazeera. "Currently, both Hong Kong and mainland China businesses haven't purchased any soybeans from the US," Lung added.
The impact of the trade war on soya beans - and the companies that deal with them - are but one front in a growing dispute between the world's two largest economies. Many other industries, commodities and entire economies are being affected.
Tit-for-tat
On Saturday, Chinese tariffs of up to 25 percent on $60bn in US imported goods take effect.
That's in response to the US move on May 10 to raise tariffs on $200bn worth of Chinese goods from 10 to 25 percent. The Office of the United States Trade Representative will hold a public hearing on June 17 and is considering imposing 25 percent tariffs on another $300bn worth of Chinese imports, including mobile phones and laptops.
US-China trade war
China's latest round of tariffs affect agricultural imports such as soybeans [Reuters]
"The tariff hike China has imposed on $60bn worth of goods, notably agricultural products and liquid natural gas, will likely result in increased business costs for those businesses reliant on inputs imported from the US," Darren Tay, a country risk analyst at macroeconomic intelligence firm Fitch Solutions, told Al Jazeera.
more @ https://www.aljazeera.com/ajimpact/hitting-pain-firms-chinas-tariffs-kick-190531102232746.html
