Here’s who pays the price for brewing U.S.-China trade war

Here’s who pays the price for brewing U.S.-China trade war


JUDY WOODRUFF: And now how this showdown is
seen from inside China. The escalating punches and counterpunches
are stoking anger and fears there of a trade war that could hit both countries. From Beijing, special correspondent Katrina
Yu reports. KATRINA YU: On the outskirts of Beijing, dinner
is served for some of farmer Yang Fuli’s 800 China’s pigs. China’s growing middle class has meant a bigger
appetite for meat. But his pigs wouldn’t grow or survive without
soybean meal, much of which is imported from the U.S. YANG FULI, Pig Farmer (through translator):
Soybean meal is a feed which provides nutritional balance and protein. KATRINA YU: And now farmer Yang could be paying
a lot more to feed them, after China announced it would be slapping imports of U.S. soybeans
with a 25 percent tariff. The levy will also be added to more than 100
other American goods, including cars and planes. ZHU GUANGYAO, Chinese Vice Minister of Finance
(through translator): China has never given in to external pressure. External pressure will only make Chinese people
even more determined. KATRINA YU: China is firing back in response
to a list of items released by the Trump administration yesterday. President Trump says it’s about leveling the
playing field. DONALD TRUMP, President of the United States:
China is going to end up treating us fairly. For many years, they had free rein. They don’t have free rein anymore. KATRINA YU: The political pressure will be
high on President Trump and his base of support in many soybean-growing states. And farmers will be hit hard, says Paul Burke,
the North Asia regional director for the U.S. Soybean Export Council. PAUL BURKE, U.S. Soybean Export Council: It
will have a negative impact on the prices that U.S. soybean farmers will receive, and
soybean farmers are already just barely getting by on the margins that they’re receiving. And anything that would depress that price
would have a serious detrimental impact to those farmers. KATRINA YU: Putting levies on U.S. soybeans,
which are also used to make cooking oil, is a high-stakes move for China, as it risks
food inflation domestically. Many had believed that it would be too sensitive
for Beijing to touch. But they were wrong, says economic Jeremy
Stevens: JEREMY STEVENS, Standard Chartered Bank: And
this idea that you can sort of pressure China into different positions, that’s proven to
not be true. And China isn’t afraid to do things that markets
struggle to, as I say, metabolize. KATRINA YU: But China is quick to remind the
U.S. that it threw the first punches, starting with 30 percent duties on solar panels and
washing machines, then the 25 percent tariffs on imported steel and 10 percent on aluminum
just weeks ago. The move forced Huayang Steel Mill in China’s
northern Hebei province to shift its strategy of focusing on the American market this year. YUE GUANYU, Hebei Huayang Steel (through translator):
The part of our industry which exports to America is facing a big loss. Orders have decreased by at least half. KATRINA YU: The measures were Washington’s
first strike in a battle to address a global trade imbalance. But while exemptions have since been given
to U.S. allies, including Canada, Australia and the European Union, the White House is
making sure China continues to feel the pinch. America’s trade deficit with China, comprised
mostly of computers and other electronics, soared to $375 billion last year, according
to U.S. figures, up 8 percent from 2016. But Chinese analysts like Bian Yongzu of Renmin
University say this isn’t what these tariffs are really about. BIAN YONGZU, Renmin University (through translator):
Where there’s a political dispute resulting in higher tariffs, the purpose isn’t to solve
a trade imbalance or trade dispute between China and the U.S. It’s more a release of anger. KATRINA YU: Justified anger, according to
some. The U.S. has long accused Beijing of unfair
trade practices, including relying on state subsidies and stealing intellectual property. American companies operating in China say
they’re forced to spill tech secrets in order to set up shop. WILLIAM ZARIT, American Chamber of Commerce
in China: This is the most important economic relationship in the world. It’s important for both countries. And yet it’s lopsided. And we need to do something to get a level
playing field, and talking for 20 years has not done it, so I guess the administration
is saying, let’s try something else. KATRINA YU: That something else has sparked
panic from businesses on both sides of the Pacific. A group of retailers, including Wal-Mart and
Macy’s, sent a letter to the Trump administration late last month, urging a rethink on extra
levies on household items such as bedding, clothing and electronics routinely imported
from China. While the new tariffs avoid these goods for
now, costs will increase for American manufacturers who depend on Chinese machinery and imported
parts. Washington’s plan targets robotics, new energy
vehicles and telecommunications. It’s a tense time for tech companies in Beijing. This is Beijing’s Zhongguancun, an area known
as China’s Silicon Valley. Many of the companies based here are worried
their exports to the U.S. will be affected by these tariffs. “PBS NewsHour” approached dozens of these
firms for comment, but all of them declined, scared to speak out, due to the sensitivity
of the climate. Frances Bea helps Chinese tech start-ups crack
the U.S. market, and says American consumers will pay the price for Chinese goods being
shut out. FRANCES BEA, Eleven International: It just
means less options at a more cost-effective price. At the end of the day, really, it’s going
to be the consumers that sort of lose out, because they might not be able to get the
latest and best technology. KATRINA YU: Beijing already slapped $3 billion
worth of tariffs on more than 100 American products this week, including fruit and wine. It’s bad news for Beijing-based wine importer
Claudia Masuger, who’s waiting on an order for 14,000 of Californian red, and will soon
find out whether she will have to foot higher taxes for them. CLAUDIA MASUGER, Wine Importer: We do have
to see. The next container of American wine will arrive
on the 6th of April. We will discover it. Of course, we’re not happy to pay more tax. Who would be? And, at the end of the day, it’s also not
good for the consumers, because they then have to pay even more. KATRINA YU: It’s not just consumers paying
the price for this brewing trade war. As farmers and industry groups deal with the
fallout from today’s announcement, others are bracing themselves for more possible tit-for-tat
measures. But from China, analysts say the message is
clear. JEREMY STEVENS: The United States is trying
to play bad cop to a sort of society that doesn’t want to be policed in that way by
the United States. KATRINA YU: And, so far, the escalation is
showing no sign of letting up. For the “PBS NewsHour,” I’m Katrina Yu in
Beijing.

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