‘Qualitative’ retaliation could take the form of increased inspections, difficulty in getting licenses, and delays and investigations for environmental compliance.
As U.S.-China trade tensions have escalated, industry panelists on Wednesday touched on the possibility that China is retaliating through unofficial, non-tariff measures, including holding U.S. goods at port for longer than normal.
In addition to potential informal retaliation, China is officially retaliating against U.S. in the form of tariffs.
After the Office of the U.S. Trade Representative on May 10 raised tariffs from 10% to 25% on $200 billion worth of goods from China, Beijing announced plans to raise tariffs across $60 billion worth of U.S. exports, starting Saturday, June 1.
Those tariffs will range from 5% to 25% and will affect a total of 5,140 goods from the U.S.
“We’ve already started to experience some of those qualitative reactions from China,” Beth Hughes, the International Dairy Foods Association’s senior director of international affairs, said. “Our members have seen their products just being stuck at the port. … Our [members’ products have] a shelf life, for the most part.”
Trade restrictions, combined with a significant population reduction of hogs in China amid swine fever, have cramped opportunities for the U.S. dairy industry to do business with the country, as U.S. companies export whey to be used in hog feed to China, Hughes said.
U.S.-China Business Council Senior Vice President Erin Ennis noted that China is implementing retaliatory tariffs against 85% of U.S. exports and said there’s “always a possibility” that China will find other ways to retaliate.
“When we began this process on [Section] 301, China said that it was willing to retaliate both quantitatively and qualitatively,” Ennis said.
While quantitative retaliation takes the form of tariffs, qualitative retaliation could take the form of things like increased inspections, difficulty in getting licenses and “inexplicable” delays and investigations for environmental compliance, she said.
“All very likely could be used as that qualitative retaliation, but at this point, it hasn’t been named that, so it may just be what it’s like to do business in China,” Ennis said.
China has consistently been a difficult place to do business, making it difficult to determine whether China has started qualitative retaliation, she said.