‘We must retaliate’ for US tariffs: China vice finance minister

One important flash point is soybeans — China is the world’s largest soybean importer, and the U.S. is its second-largest supplier. The industry employs more than 300,000 farmers in the States, but is similarly crucial to Chinese pork farmers who depend on the crop for pork production. U.S. soybean trade with China in 2016 was worth $14 billion.

Is China willing to take that hit in order to levy the retaliatory tariffs? Yes, according to the vice minister, who said that they could always turn to other trading partners like Brazil and Argentina for increased soybean imports.

“Yes indeed we need U.S. soybeans, however China is the largest consumer country for soybeans; there are many countries (that can) export more to China,” Guangyao said.

“We value our relations with U.S. farmers, we know they strongly support economic relations,” he went on. Indeed, the American Soybean Association in March strongly criticized the White House’s tariff moves, warning of potential harm to U.S. agriculture as a consequence and calling the levies “a disastrous course of action.”

“We hope they can benefit through our constructive dialogue and through our strong economic relations,” Guangyao added. “That’s why we want to assess a new idea in (a) constructive way, to solve the problem, (for) real benefit to U.S. farmers, to Chinese farmers.”

—CNBC’s Sam Meredith contributed to this report.

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