China’s decision to impose a 34% tariff on all goods imported from the United States is a direct retaliation against President Donald Trump’s tariffs on Chinese goods.
This escalation of the trade war between the world’s two largest economies is expected to have significant consequences for various industries in both countries, according to a Reuters report.
In the aviation sector, for instance, US companies like Boeing could see a decline in sales to Chinese airlines, which may opt for alternative suppliers like Airbus.
The agriculture industry will also be hard hit, as US farmers will find it more difficult to export their products to China, a major market for soybeans, pork, and other agricultural commodities.
This could lead to lower prices for US farmers and financial hardship for many in the agricultural sector.
Beyond aviation and agriculture, the tariffs will likely impact a wide range of industries, including manufacturing, technology, and retail.
US companies that rely on Chinese suppliers for components or finished products may see their costs increase, leading to higher prices for consumers or lower profits for businesses.
Chinese companies that export to the US will also face challenges, as their products become more expensive for American buyers. This could lead to decreased demand and job losses in China.
Planes
Boeing will be significantly impacted by China’s retaliatory tariffs, which will make its planes considerably more expensive than those offered by competitors Airbus and Commercial Aircraft Corporation of China (COMAC).
Sales and deliveries of Boeing to China fell sharply after 2019 due to two fatal MAX 8 jet crashes and escalating US-China tensions over technology and national security, despite Beijing not imposing tariffs on Boeing during the initial US-China trade war.
The import freeze, which ended in January 2024, didn’t see a full resumption of imports until six months later.
Air China, China Eastern Airlines, and China Southern Airlines, the three biggest airlines in the country, had planned to receive 45, 53, and 81 Boeing airplanes, respectively, between 2025 and 2027.
However, these plans may now be affected by the increased prices, according to the report.
Semiconductors
Intel assembled CPUs, which are widely used in laptops and servers, make up $8 billion of the $10 billion worth of chips that China imports from the United States annually, according to Bernstein analysts.
In 2024, China was Intel’s largest market, generating 29% of its revenue, compared to 27% in 2023.
Additionally, Micron, a US memory chip manufacturer, may be affected by potential tariffs due to importing some of its chips sold in China from the United States.
Although Micron has production facilities in China and other countries, the impact remains uncertain.
In contrast, NVIDIA’s AI chips, which are also in high demand by Chinese companies, remain unaffected by the tariffs.
This is because they are produced and assembled in Taiwan by TSMC.
Agriculture and farm equipment
The US agricultural sector will be worst hit by Beijing’s retaliatory tariffs, as China is the largest market for American agricultural products.
China has suspended import qualifications for sorghum from Chinese-owned C&D (USA) Inc., citing food safety problems.
Additionally, poultry meat and bone meal from American Proteins, Mountaire Farms of Delaware and Darling Ingredients were also suspended.
Poultry products from Mountaire Farms of Delaware and Coastal Processing were also included in the import suspension.
Furthermore, China’s retaliatory tariffs of 34%, added to an earlier 10% tariff placed on the US farm equipment sector in March, now total 44%.
These tariffs impact companies such as Caterpillar, Deere & Co, and AGCO.
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