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Trade tensions with U.S. testing resolve of Chinese consumers

Reuters  |  BEIJING 

By and Thomas Suen

(Reuters) - delights in riding his 400,000 yuan ($63,839) motorbike around Beijing's suburbs.

"I love the sound of the engine and the muscle of the motor. When I ride it, I feel free and proud," the 32-year-old said.

However, Guo has his limits.

Deteriorating trade ties between the and could mean American imports, including motorcycles, could be much more expensive in the future as the two countries trade tit-for-tat tax hikes on each other's goods.

If prices rise, said he wouldn't contemplate buying another Harley. (Click to see a picture package of products that might be affected by raised tariffs on U.S. imports)

Since entering office, U.S. has taken a hard line on trade. Last month, the world's biggest economy said it would impose tariffs on and aluminium imports from most trading partners, including

In response, slapped additional import taxes on 128 U.S. products, including frozen pork and wine. Soon after, it said it was considering additional duties on 106 U.S. imports, though it has not said when the new tariffs could kick in.

U.S. goods in the crossfire range from soybeans, cotton, autos and parts, to whiskey and particular varieties of wheat, with their value totalling $50 billion.

The tensions are already affecting consumers in China.

Zang Yi, owner of a car, said if the trade tensions resulted in pricier U.S. imports, she wouldn't consider American brands when the time comes to buy a new car.

"With the tariff, I would have to pay tax of 100,000 yuan to 200,000 yuan if I were to buy a new Tesla," she said.

Liu Anqi, 25, has just opened a bakery in with her friend. She also teaches customers how to make cakes with a brand of flour that uses only wheat from the and

"Flour is one of the most important ingredients in baking and its quality varies with different brands," Liu said, adding that finding a new brand would be time-consuming and higher taxes on this wheat would force her to raise cake prices and tuition fees, which could turn customers away.


Not all business owners are concerned.

At Wolfgang's, a high-end steak house in East Beijing's district, said U.S. beef has always been limited in China, so he doesn't know how customers would react if the restaurant has to raise prices.

A 15-kg whole cut of beef from the is around 20 percent more expensive than its Australian counterpart, said Daniel Sui, at

"Customers like U.S. beef because it tastes juicy and tender, but only sells around seven to eight pieces of U.S. imported beef steak each day," Sui said.

"The limited supply is because the bans feed additives and only 5 percent of U.S. beef is qualified for export."

Liu Ming, a at a restaurant in Beijing, said the that his restaurant uses is produced with soybeans imported from the United States, and the business won't change the brand even if prices rise.

"We use this because it gives the a bright colour and does not leave a strange smell or taste," he said.

"We don't know what will happen to our dishes if we change the "

(Reporting by and Thomas Peter; Additional reporting by and Martin Pollard; Writing by Ryan Woo; Editing by Karishma Singh)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, April 20 2018. 06:25 IST