By Joyce Yu
Philadelphia, PA–China announced a list of $60 billion worth of U.S. imports it plans to apply tariffs in responding to Trump administration’s latest trade threats. Further escalating the trade tensions, China’s Unipec, the trading arm of state oil major Sinopec, was said to have suspended crude oil imports from the United States.
Trump proposed a 25% on $200 billion in Chinese goods on Thursday and China hit back immediately, vowing to retaliate. On Friday, China said it will impose duties ranging from 5% to 25% on 5,207 kinds of American imports including aircraft, liquid natural gas and soyabean oil, should the White House carry out a threat made this week to raise tariffs on Chinese goods.
Yanmei Xie, a political analyst with Gavekal Dragonomics in Beijing, told the Financial Times, “Beijing is de-emphasizing “retaliation equal in intensity and scale” because that is difficult to execute without acceptable pain to the Chinese economy or reputation. She added that Chinese policymakers have arrived at the conclusion that Mr Trump’s trade challenge is not just about deficits but aims to thwart China’s technological advancement and alter how China governs its own economy.
“China’s capitulation to US demands, which the Trump administration seems to view as the only viable end game, is an unlikely outcome given China’s domestic political imperative of not being seen as weak and caving in to the US,” said Eswar Prasad, economics professor at Cornell University and former China head at the International Monetary Fund.
Ramping up pressure on the US, Unipec was reported to suspend crude oil imports from the United States due to a growing trade spat between Washington and Beijing, three sources familiar with the situation said on Friday. This move has also deterred other Chinese buyers such as state-owned companies PetroChina, as well as state-controlled Zhenhua Oil and independent refiners, from importing U.S. crude, three traders that participate in the market said. Unipec and Sinopec, Asia’s largest refiner and biggest buyer of U.S. oil, did not comment to the speculation.
Energy products, including crude oil and refined products, were on the Chinese tariff hiking list of American goods. To avid adverse impact from tariff, Chinese buyers had already slowed their purchases of U.S. oil. Crude oil imports from the United States to China averaged at 334,880 bpd in the first eight months of this year, according Thomson Reuters Eikon’ data, but this is expected to fall in September to 197,515 bpd.