China’s Commerce Ministry announced the country has stopped buying U.S. agricultural products and may impose additional tariffs following President Trump’s announcement that he will impose additional tariffs on Chinese goods, Reuters reported.
“China’s announcement that it will not buy any agricultural products from the United States is a body blow to thousands of farmers and ranchers who are already struggling to get by,” said American Farm Bureau Federation President Zippy Duvall. “In the last 18 months alone, farm and ranch families have dealt with plunging commodity prices, awful weather and tariffs higher than we have seen in decades.”
In response to Trump’s action, the Chinese government allowed its currency to fall below a seven-to-the-dollar level, and the United States named China a currency manipulator. People who study economic diplomacy between the United States and China warn that this tension could spill into other areas of policy and create ripple effects for the world economy, The New York Times reported.
Trump shrugged off the Chinese response, saying in a Reuters article that investment was pouring into the U.S. economy. He also pledged to stand with American farmers in the face of Chinese retaliation.
CNN Business reports the trade war has reached a new level of seriousness that will be difficult to reverse. The risk is that the trade war is approaching the point at which it causes a severe economic slowdown or even a recession.