© New Zealand Broadcasting School 2021

China orders $50 billion in tariffs focused on US agriculture

Duncan Weich

A trade war is on the horizon, with the Chinese Finance Ministry hitting back at the United States' recent tariffs with $50 billion of its own.

United States President Donald Trump has spent recent months bragging that trade wars are easy to win, and recently imposed $60 billion in steel and aluminium tariffs, to which China quickly responded with about $3 billion.

The new tariffs from China are aimed at US agriculture, specifically, soybeans, bringing Chinese tariffs closer to those imposed by the US.

China exports about 2% of its steel to the US, while nearly a third of US soybeans are exported to China.

American farms sold around $14 billion in soybeans to China last year, and the farming areas that cultivate the beans tend to be Republican-leaning, suggesting the tariffs will disproportionately hurt Donald Trumps supporters.

Donald Trump denied that the United States was entering a trade war, arguing that any trade war has already been lost by past leaders of the country.

The total United States-China trade relationship is worth around $650 billion, and the numbers right now are comparatively small, but China's Vice Finance Minister Zhu Guangyao says China doesn't want a trade war.

He says it would be a lose-lose.

Stock responses were near immediate, with the Dow Jones falling 500 points as trading opened Wednesday morning in New York.

Standard and Poor 500, and NASDAQ also fell.

Soybean futures investment plummeted within minutes of China's announcement, with a -4.19% hit in just over two hours.

soybean stock