The Trump regime announced last night that it would impose additional tariffs on $16 billion in Chinese goods and, in response, China announced this afternoon that they'll impose retaliatory tariffs on $16 billion in American goods.
Once again, China's tariffs are going to hit right where it hurts members of Congress the most by targeting politically and economically sensitive industries including the oil and gas industry.
The Chinese Ministry of Commerce announced a 25 percent charge on $16 billion worth of U.S. goods. The 333 goods being targeted by China include vehicles such as large passenger cars and motorcycles. Various fuels are on the list, as well as fiber optical cables.
China is also going after coal, grease, Vaseline, asphalt and plastic products, and recyclables. [...]
Meanwhile, the Chinese Ministry of Commerce said it must retaliate against the U.S. tariffs "to defend the nation's dignity."
In addition to American coal, China is also imposing retaliatory tariffs on diesel, crude oil and liquefied natural gas.
Just as it was for many other products, China is (or was) the largest market for exports of American crude oil. Oil stocks took a hit in response to the news this afternoon and may see additional losses in the future.
Obviously, none of us are going to shed a tear if oil stocks take a beating, but this is the kind of thing that will leave elected Republicans vulnerable to challengers. This is the first time China has targeted exports of American crude oil.
When China runs out of American products to impose tariffs on, analysts expect they will increase the size of each tariff. Retaliatory tariffs may increase from 25 to 35 percent or greater. And in some cases, such as we've already seen with soybeans and sorghum, China will stop purchasing certain products from America altogether.
It's unlikely that China will be able to match Trump's tariffs in a sustained tit-for-tat because we don't export as much as they do, but they don't necessarily have to. China's retaliatory tariffs on American goods will inflict more focused pain than our tariffs will on them precisely because we export less than they do. Closing off the biggest market in the world to what little we export will have consequences for businesses that even partially depend on trade.