China has kept true to its promise of matching U.S. tariffs in scale and intensity by levying higher tariffs on $3 billion worth of U.S. goods, including a 15 percent tariff on the steel pipe that is used in oil and gas pipelines.
While this particular steel pipe is manufactured in the pro - Trump state of Texas, it is not expected to have much of an impact on the export of these products. However, according to Praveen Kumar, executive director of the University of Houston’s Gutierrez Energy Management Institute, if the trade war escalates to broader energy related machinery classes, then Houston will be more exposed.”
There are already signs that this will happen. 1300 Chinese products are on a list for additional tariffs in the United States.
"This will likely trigger a second round of countervailing penalties from China", Cambridge Global Payments director Karl Schamotta said, "and shortly after last night's statement, several party-controlled media outlets said that a second round of penalties could include strategically vital product categories like soybeans and aircraft".
Amid all the inflamed rhetoric and tit-for-tat actions it is noteworthy that Washington has begun behind the scenes talks in resolving divisive trade policies through negotiation. Yet if these drag on leading to further punitive measures, the Chinese seem prepared: “We have the confidence and ability to respond to any US trade protectionist measures,” a spokesperson said. “As the Chinese saying goes, it is only polite to reciprocate.”