China announced reciprocal tariff on 128 USA products

The Chinese Ministry of Commerce on 23 March 2018 announced a list of discontinuation concessions for imports of steel and aluminium from the USA while proposing tariffs on 128 other products in a response to US’s controversial trade tariffs.

Exports from the USA to China worth about USD 3 billion in 2017, according to the Ministry. Would China and the United States fail to reach a trade compensation agreement within the stipulated time, China would exercise the tariff for the 128 products from the USA in two stages. The first part covers a total of 120 taxes involving USD 977 million in US exports to China, including fresh fruit, dried fruit and nut products, wine, modified ethanol, American ginseng, and seamless steel pipes, and is expected to impose a 15% tariff. The second part covers a total of eight taxes involving USD 1.992 billion of US exports to China, including pork and products, recycled aluminium, etc., and a 25% tariff is proposed. China also threatens to take necessary legal action to the World Trade Organisation.

While there are no further details on which products are included in the 128 list, players in the petrochemical industry started showing concern regarding the near-term market outlook, as this outbreak trade war would negatively impact the sentiment.