TOKYO --The tariffs that the U.S. and China are threatening each other with would exact significant pain on the American auto and agriculture industries as well as other vulnerable goods.
The U.S. late last week said it will start imposing 25% duties on $34 billion worth of Chinese products on July 6. Another $16 billion in tariffs would come at a future date. Beijing responded almost immediately with its own list of tariffs on $50 billion worth of imports from the U.S. The first $34 billion worth would also take effect on July 6, with the rest kept in reserve in case Washington further escalates matters.
Trump did just that on Monday in Washington, announcing that he would slap tariffs on another $200 billion worth of Chinese goods.
China then said it would have no choice but to impose the tariffs it has kept at the ready.
Though China has mirrored the U.S. in terms of scale and timing, the content of the two lists differs greatly.
Japan's SMBC Nikko Securities found that the items covered by the U.S. duties made up just 6.4% of American imports from China in value terms last year. The highest-value categories included high-tech products and related parts such as boilers, turbines, electric motors and medical equipment, while major consumer goods such as mobile phones and televisions were left off the list.
But the 545 items in Beijing's first wave of retaliatory duties accounted for 22.5% of Chinese imports from the U.S. Many of the tariffs target products for which American exporters depend on the Chinese market. China received 55% of U.S. soybean exports last year and nearly 17% of the automobile-related and cotton goods shipped overseas.
The anticipation of the tariff has sent soybean futures tumbling. Prices in Chicago sank 3% on Friday to a year-to-date low of just over $9 per bushel.
"Even if the U.S. imposes additional tariffs, China will retaliate, so the burden on exporters and consumers in the U.S. is expected to further increase," said Yoshimasa Maruyama, chief market economist at SMBC Nikko. Before Trump's latest escalation, Maruyama said America will "pay a big price for Trump's decision."
As for the American tariff list, more than 10% of the U.S. imports of these items come from China. Businesses that source these goods from the Asian power will need to decide whether to find alternatives elsewhere.
The trade friction looks to affect about 100 crucial electronic parts -- such as printed circuit boards and liquid crystal display panels -- commonly imported from China, an American industry group for semiconductor manufacturing equipment makers said in May. The tariffs could benefit companies in other countries that make these products but have been overshadowed by Chinese competition.
Companies in Japan are making contingency plans. Fuji Xerox, a unit of Fujifilm Holdings, produces copiers and other office equipment in China for export to the U.S. But with the copier parts and consumables soon to be subject to the American tariffs, the company is considering options such as relocating production.
Beijing's tariff on American soybeans will hit Japanese trading houses. Marubeni, which handles 60 million to 70 million tons of grain annually worldwide, said it will adapt by selling to Brazil and other markets if exporting to China becomes too difficult.