Chinese companies have stopped buying agricultural products made in the US, and Beijing is considering imposing tariffs on all US farm goods purchased after 3 August, China's ministry of commerce announced shortly after midnight on Tuesday, according to Reuters.
"Related Chinese companies have suspended purchases of US agricultural products," the ministry said, without specifying the value of imports subjected to the tariffs. "China's market capacity is large and it has bright prospects for importing high-quality US agricultural products," the ministry added, saying it looked forward to the US keeping its promises to create the "necessary conditions" for continued cooperation.
The ministry's statement comes on the heels of reports by Chinese media, including Xinhua, about possible new tariffs on US agricultural goods.
Earlier, Bloomberg reported, citing informed sources, that Beijing was asking state-owned enterprises to suspend imports of US agricultural products amid spiraling trade tensions with the US, with state-run agricultural giants now said to be biding their time in anticipation of further trade talks.
Last Thursday, a day after the two economic giants wrapped up trade talks in Shanghai, President Donald Trump announced plans to slap a 10 percent tariff on $300 billion of Chinese imports starting 1 September, accusing Beijing of failing to meet its pledge to buy "large quantities" of agricultural products from the US despite agreeing to do so at the G-20 summit in Osaka, Japan in late June.
Earlier Monday, the Chinese yuan fell to its lowest level on record against the US dollar amid concerns of another escalation in the trade war, with President Trump accusing the country of deliberately engaging in "currency manipulation" and saying the move would "greatly weaken China over time."
China dropped the price of their currency to an almost a historic low. It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!— Donald J. Trump (@realDonaldTrump) 5 августа 2019 г.
US and Chinese officials are expected to continue trade talks in Washington, DC next month.
Last week, US media reported that President Trump's hard line on China has been met with dissent in his own cabinet, with an anonymous source telling the Wall Street Journal that US Trade Representative Robert Lighthizer, Treasury Secretary Steve Mnuchin, economic adviser Lawrence Kudlow and National Security Adviser John Bolton all opposed the new tariffs.
Beijing had earlier warned that it would retaliate to any new tariffs, with media reporting that the retaliation would target everything from clothing to toys to electronics. Since the trade spat began in mid-2018, Beijing has remained reluctant to escalate the conflict with Washington. However, following President Trump's tariffs announcement on Thursday, Hu Xijin, editor-in-chief of the influential Global Times newspaper, said China "will no longer give priority to controlling" the "scale" of the trade war, focusing instead on a "national strategy under a prolonged trade war."
In mid-2018, the US slapped tariffs on $50 billion in Chinese imports to try to deal with the US's staggering $400 billion+ trade deficit. China responded with tariffs against US goods, and the conflict has escalated into a series of back and forth tariff hikes. In May, the US imposed a 25 percent tariff on another $200 billion worth of Chinese products, with China pledging to hike tariffs on $60 billion in US imports. Along with the import duties, the US has resorted to blacklisting Chinese tech giant Huawei, accusing the company of installing "backdoor" access to its devices to help Chinese intelligence services spy on users worldwide. China has denied the claims.