China, Oregon's largest export market, threatens retaliation for proposed tech tariffs

President Donald Trump and China's President Xi Jinping. (KATU file image).

An international trade conflict impacting Oregon's economy heated up Tuesday.

China's commerce ministry said it "strongly condemns and firmly opposes" new tariffs proposed by President Donald Trump. The country also warned of retaliatory action.

China is Oregon's largest export market.

At this point technology, Oregon's biggest export, hasn't been touched by China's new tariffs.

But now China is threatening to impose measures similar to what Trump just proposed: 25 percent tariffs on $50 billion in Chinese tech imports.

Trump said it's in protest of China's theft of American technology. Late last month he imposed a tax on Chinese steel and aluminum. That led to new Chinese tariffs, which went into effect Monday.

Those taxes impacted 128 U.S. products including some big Oregon exports like aluminum scrap, which faces a 25 percent tariff, as well as food like wine and hazelnuts, which China is taxing at 15 percent.

Terry Ross, the executive director of Oregon's Hazelnut Growers Bargaining Association, said the state's hazelnut industry has been at an unfair advantage anyway.

“So now instead of just being at a high tariff we’re at an unreasonably high tariff," he told KATU Tuesday afternoon. "We’re hopeful that the situation will create a dialogue between the Oregon hazelnut industry and the Chinese government.”

Larry George, owner of the George Packing Company in Hubbard, which processes and exports hazelnuts, said about half the market for Oregon's $100 million hazelnut industry is in Asia. But he told KATU growers here have long avoided selling directly to China.

"I feel very negative about it. I don't think that's a good thing," Jin Lan, the president of the Oregon China Sister State Relations Council, said about the new Chinese tariffs. "There are about 20,000 people in Oregon depending on Oregon-China trade. Oregon's one of the four states in the United States which has a trade surplus with China. That means we export more than we import from China."

Lan hopes the trade conflict between the world's two biggest economic powers doesn't escalate any further.

"If indeed these two countries go to a trade war that has huge impact on the global economy," he explained.

Meanwhile, Robert Hamilton, Washington Governor Jay Inslee's adviser for trade policy, said the biggest exports affected there are cherries, aluminum scrap and apples.

“We shipped about $100 million worth of cherries last year and China’s announced a 15 percent tariff on that," Hamilton explained. “Apples, we shipped $17.6 million to China. Again it’s a 15 percent tariff. And a 25 percent tariff on aluminum scrap and waste and we shipped about $49 million worth of that product to China last year.”

Trump's proposed technology tariffs wouldn't take effect until after a public comment period ends May 11.

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