(Reuters) – China on Tuesday swiftly retaliated in opposition to recent U.S. tariffs, saying 10%-15% hikes to import levies protecting a variety of American agricultural and meals merchandise, and putting 25 U.S. companies below export and funding restrictions.
COMMENTS:
OLE HANSEN, HEAD OF COMMODITY STRATEGY, SAXO BANK
“From a pricing perspective, that is occurring at a really unhealthy time for U.S. corn costs, which have been already below some promoting strain from hedge funds that previously few months accrued very giant and prolonged bets on increased costs.
“This may proceed to extend China’s dependency on Brazil corn and soybeans whereas inflicting quite a lot of stress amongst U.S. farmers who’re about to make their spring planting selections within the coming weeks.”
“Whereas the strikes from China might not be notably daring, there’s a cause to consider that China needs to be on the negotiating desk with Trump reasonably than sitting again and absorbing the blows. The transfer nonetheless brings dangers of an escalation first in commerce tensions earlier than decision.
“China’s actions is also indicative of the truth that they might be extra assured of responding to home headwinds now, particularly as they catch as much as the AI race. There can be elevated give attention to what coverage stimulus come by from the dual periods.”
TOMMY XIE, HEAD OF GLOBAL MACRO RESEARCH, OCBC BANK, SINGAPORE
“Trade charge is a relative idea, and so is tariff. So long as different international locations are additionally levied tariffs, or have such expectations, it will not be that unhealthy. The factor to fret about is just one particular person will get tariffs. If the USA prices everybody, it is going to be thought-about as paying safety price.”
CHARLES WANG, FOUNDER, DRAGON PACIFIC CAPITAL MANAGEMENT, SHENZHEN
“The U.S. is dealing with varied challenges, and the commerce battle will solely make issues worse. They embody inflation, relations between the U.S. and Europe and China.
“For China, we’ve decreased commerce dependency with the U.S. from 23% to round 13%, so the direct affect is proscribed. As well as, China’s financial system is recovering, and the parliamentary assembly will present extra indicators for supporting the financial system.
Due to this fact, I do not suppose the inventory market trajectory can be modified. There’re some curbs on the Hong Kong market, which, if something, wants a small correction. However it’s OK. Not a giant deal.”
LIU JINLU, AGRICULTURAL RESEARCHER AT GUOYUAN FUTURES, BEIJING
“This information has raised issues about tightening home agricultural provides, benefiting the sector. China’s 10% tariff on U.S. soybeans will enhance prices and cut back U.S. imports, main China to spice up imports from Brazil and different international locations.
“Nevertheless, South America, particularly Brazil, is approaching its soybean export restrict after years of progress (2024 exports are anticipated at 96 million tons). At present within the harvest season, Brazilian soybeans haven’t but arrived in giant portions at Chinese language ports however are anticipated in Q2. With the extra U.S. tariffs, the already tight soybean inventory will grow to be much more strained.”
GENEVIEVE DONNELLON-MAY, RESEARCHER AT OXFORD GLOBAL SOCIETY, MELBOURNE
“Whereas the brand new tariff announcement will not be as heavy because the 25% in 2018, it does goal most of the similar agricultural merchandise. As well as, the ten% tariff could present Beijing with the chance to extend the tariffs on U.S. agricultural items by one other 10% and even 20% within the coming months and years.
“Soybeans have been thought-about a weak hyperlink in the course of the first Trump administration however Chinese language policymakers have discovered classes from that point and are, in idea, a lot better ready, due partially to Beijing’s meals import diversification technique.”
WANG ZHUO, PARTNER AT HEDGE FUND ZHUOZHU INVEST, SHANGHAI
Elevating tariff on China “will possible damage the U.S. itself because it wants low cost Chinese language merchandise to carry down inflation. Larger tariffs on U.S. agricultural merchandise may even negatively affect China”, however countermeasures are politically crucial. “So, it could be clever to make some symbolic transfer with out triggering an escalation in tensions.”
DENNIS VOZNESENSKI, ANALYST, COMMONWEALTH BANK, SYDNEY
“Chinese language tariffs on U.S. wheat and corn imports ought to be supportive for demand for Australian wheat and barley exports. Nevertheless, China’s latest slowdown in imports of feed grains from all origins ought to mood the joy.”
WAN CHENGZHI, ANALYST, CAPITAL JINGDU FUTURES, DALIAN CITY
“Contemplating that China’s peak import interval for U.S. soybeans has already handed, the affect of those countermeasures on the full quantity of U.S. soybean imports is proscribed. Any worth will increase sooner or later are prone to be extra of an emotional market response.”
OLE HOUE, DIRECTOR OF ADVISORY SERVICES, IKON COMMODITIES, SYDNEY
“It’s broadly adverse for U.S. agricultural markets. It’s going to have a bearish affect on costs. There are sufficient corn and soybean provides on the earth for China to make the swap, it’s extra of a difficulty for the U.S., 30% of U.S. soybeans nonetheless go to China.”
EVEN PAY, AGRICULTURE ANALYST, TRIVIUM CHINA
“It is notable that Beijing’s response is restrained. Trump has now imposed a complete of 20% tariffs on all Chinese language merchandise. China’s tariffs affect a restricted variety of U.S. merchandise, and stay under the 20% stage. That is by design. China’s authorities is signalling that they don’t need to escalate, they need to deescalate.
“It is honest to say we’re within the early days of Commerce Conflict 2.0. There’s nonetheless time and area to keep away from a protracted, entrenched commerce battle if Trump and Xi can strike a deal.”
ROSA WANG, ANALYST, SHANGHAI-BASED AGRO-CONSULTANCY JCI
“From the provision and demand perspective, the short-term affect on the home market will not be important. The explanations are: 1. It’s at the moment the South American soybean season, whereas the U.S. soybean is within the low season; 2. The quantity of U.S. soybeans bought by China has decreased, and the proportion of U.S. soybeans in China’s soybean imports has dropped to 17%.
“Nevertheless, the massive variety of merchandise concerned this time will add additional difficulties to China’s aquatic product exports to the U.S., particularly tilapia exports. With the extra 10% tariff, the tariff on tilapia exports to the U.S. will attain 45%, making it principally unimaginable to export to the U.S.”
(Reporting by Reuters Asia bureaus; Compiled and edited by Subhranshu Sahu)
