China Strikes Back at US Tariffs with Fresh Levies on Farm Goods

China has retaliated against US President Donald Trump's latest tariffs, imposing new levies on a wide range of American agricultural products, Nikkei Asia reports. These countermeasures come in response to fresh 10% tariffs imposed by the US on Chinese goods, escalating the ongoing trade war.

In a statement published Tuesday, China's Ministry of Finance announced 15% tariffs on chicken, wheat, corn, and cotton, as well as 10% duties on soybeans, sorghum, pork, beef, dairy products, and other agricultural produce. These tariffs are set to take effect next Monday.

The US, meanwhile, has imposed two rounds of 10% tariffs on Chinese exports, estimated to be worth over $500 billion by Chinese customs calculations. On Tuesday, the US also proceeded with 25% tariffs on imports from Mexico and Canada following the expiration of a one-month reprieve.

In addition to the retaliatory tariffs, China's Ministry of Commerce added 10 American companies, including military-linked firms involved in selling weapons to Taiwan, to its "unreliable entity list." Fifteen companies were also added to an export control list.

US biotech company Illumina, already designated an unreliable entity by China, was banned from selling gene sequencing devices to the country. The Ministry of Commerce also launched an investigation into US fiber optic products, citing suspicions of anti-dumping measure circumvention. This probe is expected to last six months, with the possibility of extension.

Separately, Chinese customs announced an immediate halt to imports of US logs following the detection of forest pests. The authority also revoked the qualifications of three American companies to import soybeans into China, citing health and food security concerns related to a type of fungus.

China also filed another lawsuit against the US at the World Trade Organization (WTO), reiterating a complaint initially brought in February regarding Trump's initial 10% tariff.

"The U.S. unilateral tariff measures seriously violate WTO rules and undermine the foundation of economic and trade cooperation between China and the U.S.," stated a spokesperson for the Ministry of Commerce. "China is strongly dissatisfied and resolutely opposes them."

This tit-for-tat escalation echoes the response to Trump's first round of 10% tariffs last month, when China imposed targeted duties on American coal, liquefied natural gas, crude oil, farm equipment, and certain vehicles.

Trump's decision to double down on tariffs raises the average effective levy on Chinese imports to approximately 34%, marking a significant increase in the tariff rate on China compared to the entire first Trump administration.

Experts suggest that Beijing could mitigate the impact of these tariffs by boosting government spending on infrastructure programs and supporting household spending, although achieving last year's 5% GDP growth could prove challenging.

China's top leaders, including President Xi Jinping, are convening for their annual "Two Sessions" meetings this week, where policymakers will announce this year's economic growth target and outline stimulus plans.

"It's a significant headwind at a bad time, given the existing tariff and the murky outlook on the external front," noted Louis Kuijs, chief Asia economist at S&P Global Ratings, regarding the escalating trade war.

China's latest retaliatory measures are arguably more impactful than those taken previously. Last month, China imposed 10% to 15% tariffs on approximately $14 billion worth of energy and other imports from the US, expanded export controls on key minerals, blacklisted certain American companies, and opened an investigation into Google.

This time, Nomura economists estimate that China's tariffs will affect $22.3 billion worth of US goods.

China's focus on American farm exports is significant, considering these exports have risen from 4% of the total during 1998-2004 to 15% during 2012-2023, according to the US Department of Agriculture.

China remains a major buyer of US food products like corn and beef. Last year, it imported $24.7 billion worth of agricultural output from the US, making it the third-largest customer behind Canada and Mexico.

However, the two superpowers are less reliant on each other than in the past. US statistics show that overall imports from China fell from 21.6% of the total in 2018 to 13.4% in 2024.

Similarly, China has been reducing its reliance on certain US farm products by sourcing from countries like Brazil and promoting domestic substitutes. Imports of US oilseeds and animal feeds plunged 23% last year compared to 2023, and were down 29% from 2021.