What’s Next for Trump, After China Calls His Bluff by Suspending U.S. Agri Purchases?


China is letting Trump make good on his 10% tariff threat on the remaining $300 billion worth of Chinese goods coming into the U.S. Rather than take steps to appease Trump with what he considers as a better deal, and before the tariff takes effect on September 01, 2019, the Chinese government has taken a harder stance.

Not by matching tariff for tariffs on imports but by suspending China’s procurement of U.S. agricultural products altogether.

So is Trump going to make good on his threat of increasing the tariff to 25%? It seems that China is willing to face its own challenges of an economic downturn, which could still transpire next year. China’s Minister of Industry said that as it is, the country can still meet its 6%-6.5% growth target for 2019.

China is not budging, letting Trump rollout all the tariff threats he can muster. A spokesperson from the Ministry of Commerce said that Beijing is not ruling out the option of imposing tariffs on previously ordered U.S.agricultural products that arrived in China after August 03, 2019.

U. S. farmers remain in a bind; still unable to cope with the economic effects of the U.S. China trade war that has dragged on for more than a year. Now they stand to lose even more, since China is one of the biggest buyers of soybeans and other agricultural produce. .

What Will Happen if the $300 Billion Worth of Chinese Goods will be Slapped with a Higher Import Tariff?

If by September the trade war continues to escalate, consumers are likely to think twice when planning where to buy gifts for Christmas. A 10% tariff, which could still increase to 25%, will be the retailers’ turn to face uncertainty, especially during the holidays. After all, the items included in the $300 billion worth Chinese imports are mobile phones, laptops, toys and video game consoles. Products most consumers plan to buy with their Christmas bonus.

Will the phenomenon of the so-called “economics of Christmas” still work? Consumers tend to buy “China-Made” products because they are supposed to be cheaper, but without expecting much in terms of quality. Yet will consumers be willing to pay more for the same items? They know fully well that the additional cost is only the result of the US China trade war and not because of product improvements or upgrades whatsoever.

After which, Trump will boast that the country raked in billions of dollars from the tariffs imposed on imported Chinese goods. This may technically be true, but in the end part of those billions will come from consumers. They will be the ones paying for the taxes because retailers will use them as justification for increased prices.

Anyway, consumers nowadays are more savvy, because they can look for other bargain deals online; being fully aware of how Trump’s tariffs on Chinese goods will affect them. The Amazon online store for one, is making it known that on September 04 to 08, 2019, they will be holding the Amazon Great Indian Sale. This is a much awaited pre-Christmas event, since in 2018, Amazon customers were able to find thousands of great bargain deals, including on electronic items.