New Chinese Tariffs Could Hurt The US ... And China

China says its move to tax about $3 billion of U.S. imports is about protecting its economy from American tariffs. But the new taxes might also to hurt a few Chinese interests.

One major example is China's new 25 percent tariff on American pork. China imported $1.1 billion in U.S. pork products in 2017; higher tariffs could drive that number down.

One of the largest U.S. pork producers hit by this change is Smithfield Foods — which is actually owned by Chinese company WH Group. Some experts say this tariff news might not affect the company too much; pork exports to China have already decreased. But WH Group's share price did fall 10 percent at one point on the news.

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Chinese tariffs could also get in the way of the government's policy objectives — specifically, a pledge to blend all gasoline with 10 percent ethanol by 2020.

A 15 percent tariff on U.S. ethanol imports could put that goal out of reach. China's ethanol industry currently produces about 2.5 million metric tons of ethanol a year. But Reuters estimates the country will need 15 million metric tons to meet its target.

And of course, most tariffs ultimately rebound on consumers. A slew of new taxes on U.S. fruits and nuts could force China's middle class to look elsewhere for affordable health foods.

This might just be the beginning for the U.S.-China trade fight. The White House has suggested it might levy new tariffs over China's alleged technology and intellectual property activities, which could prompt more retaliation from China.