President Donald Trump has vowed that "trade wars are good and easy to win." But as the U.S. on Friday made good on threats to impose steep trade tariffs on China, it was hard to identify any beneficiaries.
And because Trump has spurned long-standing rules that call for trade disputes to be handled by the World Trade Organization, there is little hope for a short-term resolution, according to Matthew Gold, a former U.S. trade negotiator.
“The other countries involved really can’t negotiate,” he said. “The only option is to retaliate.”
As of midnight Washington time, the Trump administration began imposing tariffs on as much as 25 percent on $34 billion in Chinese imports. In response, China implemented retaliatory tariffs on some imports from the U.S., said its foreign ministry, according to a Reuters report.
The Trump administration initiated the dispute in April, announcing the tariffs and accusing China of using “unfair” tactics to build a large trade surplus with the U.S. and expropriating American technology. The White House has also pressed Congress to tighten rules on Chinese investment in U.S. technology.
“These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs,” Trump said.
Despite the urging of business groups and lawmakers to negotiate a truce, there was little sign Friday that the two sides would reach a compromise anytime soon. Beijing and Washington had held several rounds of high-level talks since early May, but the Trump administration has said it is considering expanding the list of targeted Chinese imports. Trump has threatened additional 10 percent tariffs on another $200 billion in Chinese goods if Beijing proceeds with its own retaliatory tariffs.
When China retaliates, higher tariffs will hit American exports from cars to soybeans. That would bring the trade war home to states that rely on agriculture and manufacturing, many of which supported Trump in the 2016 presidential election. American soybean farmers send about 60 percent of their crop to China.
So far, the tariffs represent a relatively small portion of U.S. China trade. That means the immediate economic impact of the trade war could be limited for both sides, another reason some analysts expect the dispute to linger for some time.