China’s consumer prices will not be seriously impacted by tariffs on US agricultural products, Chinese economic analysts said.
Following the US imposition of increased tariffs on Chinese goods, since July 6 China has levied additional 25 percent tariffs on 517 agricultural products imported from the US, including soybeans, cotton and pork, the Ministry of Commerce said.
Some voices online expressed concern that tariffs on US agricultural products will result in price hikes on consumer products, but Zhang Gang, chief analyst of Southwest Securities, told the Economic Daily that the effect will be limited. Zhang said China’s consumer price index (CPI), the main gauge of inflation, is not closely related to the price of imports, because based on previous data, inflation is mainly affected by prices of goods and services such as pork, medical services or real estate.
Ricing prices in July were affected by extreme weather - heatwaves and heavy rain - which affected the production, storage and transportation of agricultural products. July is also peak tourist season, which greatly stimulates tourism demands. Zhang said he was optimistic over the price of soybeans in China, saying that even if the price rose by 25 percent, the CPI would only rise 0.35 percent.
China can minimize the impact of raising tariffs on farm products from the US by increasing imports from other places, such as South America, and adjusting domestic agricultural patterns, Han Jun, deputy head of the Office of the Central Leading Group for Rural Affairs and vice-minister of agriculture and rural affairs, told the China Daily.