US-China trade war goes up another gear with more tariffs on both sides

20 Sep 2018 --- The US government has threatened another wave of trade tariffs on China and this time they include key commodities like rice and a myriad of other items. As a result, a number of industry groups have rallied against President Trump’s latest escalation of the so-called trade war and others are backing the Administration’s stance.

Many US organizations impacted by the growing list of tariffs are calling them “costly and counterproductive,” but USA Rice is behind the Administration’s growing list of tariffs.

Speaking to FoodIngredientsFirst, Bob Cummings, Chief Operating Officer of USA Rice, explains why the tariffs will help in the market access objectives in China.

“In an earlier round of retaliation, China increased import duties on US rice by 25 percent ad valorem even though it is illegal under Chinese statute to import US rice, while the US market has long been open to imports of rice from China,” he says. 

“Our industry has been working with the US government for over a decade to gain market access to China, which China provided as a commitment to all WTO members when it joined the organization at the beginning of this century.”

“While we have made some progress in the past 14 months towards market access for US rice in China, we have a way to go, and we see the President’s actions earlier in the week as an encouragement to China and as a way to level an uneven playing field.”

According to the industry body, the tariffs will impact brown rice, milled and semi-milled rice, parboiled rice and broken rice. 

This latest episode of the ongoing trade dispute follows meetings between US and Chinese officials last month aimed at easing trade tensions and restoring dialogue, which ultimately failed. The period between September 24 and January 1 is a chance for China to change its trade policies, a demand China has so far been unwilling to meet, says USA Rice. 

“The US is currently an open market for rice and levies effectively zero duties against imported rice, regardless of its origin, yet China currently does not accept US-grown rice,” adds Bobby Hanks, Louisiana miller and chair of the USA Rice International Trade Policy Committee. 

“The new 10 percent tariffs on brown, milled, semi-milled, parboiled and broken rice from China will go to 25 percent on January 1, which will certainly help stem the rising tide of Chinese rice imports into the US.”

President Trump’s latest round of tariffs will not come into effect for some time and could be delayed until after Christmas, but some industry representatives are voicing their concerns about the increasing number of tariffs hurting various US food sectors and ultimately consumers who will be forced to pay higher prices. 

President Trump is ramping up pressure on China where the trade war between the two world economies is poised to intensify in the months ahead if neither world leader backs down – and there is no sign of that. The trade disputes of the last few months have been causing uncertainty and concern in the US economic community and across several food sectors as the Administration remains embroiled in different trade battles with several key allies.

The latest round of duties, believed to be the biggest yet from Washington, will apply to almost 6,000 items. Unless the US and China agree on a deal beforehand, these tariffs will start at 10 percent rising to 25 percent. President Trump continues to say that his tariffs are in response to China’s “unfair trade practices.”

China has also retaliated with further tariffs of its own which relate to US$60 billion of US goods including an additional 5 percent in the duty imposed from September 24 on items like meat, wheat and wine. 

US National Retail Federation (NRF) President and CEO Matthew Shay warn about the risks to consumers that grows with tariff escalation. 

“Every time this trade war escalates, the risk to US consumers grows. With these latest tariffs, many hard-working Americans will soon wonder why their shopping bills are higher and their budgets feel stretched,” he says. 

“We cannot afford further escalation, especially with the holiday shopping season right around the corner. The mere talk of tariffs on all remaining Chinese imports is of serious concern to retailers since tariffs of that magnitude would touch every aspect of American life. Achieving better trade deals is an important priority, but there is nothing better about it when American families are forced to pay higher prices for everyday purchases.”

NRF and more than 100 organizations recently launched a multi-industry coalition – Americans for Free Trade – aimed at opposing tariffs and highlighting the benefits of international trade to the US economy. 

The new coalition is coordinating with Farmers for Free Trade in a multi-million dollar national campaign known as Tariffs Hurt the Heartland which tells the stories of the American businesses, farmers, workers and families harmed by tariffs through public events, digital advertising and social media. 

Read more on our previous coverage on the trade war read here and here.

Our sister website, NutritionInsight, recently featured an interview on the botanical implications of the tariffs. George Pontiakos, President/CEO of BI Nutraceuticals believes that the tariffs are reasonable and do offer perspective.

By Gaynor Selby