China Seen Hitting Back at US Farm Exports Over Trump Tariffs

China is likely to target US agricultural exports when it strikes back at 20% import tariffs that President Trump has threatened to impose on Tuesday, according to a state-backed media outlet.

The Global Times reported on Monday that Beijing is studying countermeasures over Trump’s threat last week to impose an extra 10% duty on China – resulting in a cumulative 20% tariff – because of its lack of progress in limiting the flow of fentanyl coming into America.

The retaliatory action allegedly planned by China, which has described the threat as “blackmail,” raises the stakes in an escalating trade war between the world’s two biggest economies.

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“China is studying and formulating relevant countermeasures in response to the US threat of imposing an additional 10% tariff on Chinese products under the pretext of fentanyl,” Global Times wrote, citing an anonymous source.

“The countermeasures will likely include both tariffs and a series of non-tariff measures, and US agricultural and food products will most likely be listed,” the report added.

China’s commerce ministry and the US embassy in Beijing did not immediately respond to requests for comment.

China is the biggest market for US agricultural products, and the sector has long been vulnerable to being used as a punching bag in times of trade tensions.

“Despite a decline in imports since 2018, any tariffs on key US agricultural products like soybeans, meat and grains could have a significant impact on US-China trade as well as US exporters and farmers,” Genevieve Donnellon-May, a researcher at the Oxford Global Society, said.

“The US agricultural sector has had time to prepare for a second Trump administration and trade war 2.0, with lessons learned from the first Trump administration,” she added.

“So, in theory, it should be in a better place to find alternative markets. However, the reality may prove far more complex.”

China’s most active soymeal and rapeseed meal futures, already underpinned by a supply shortage, each surged 2.5% after the Global Times report. The soymeal contract on the Dalian Commodities Exchange hit its highest since September 30, 2024.

US agricultural imports declining

The world’s top agricultural importer and second-largest economy brought in $29.25 billion worth of US agriculture products in 2024, a 14% drop from a year earlier, extending a 20% decline seen in 2023.

Global Times, which is owned by the newspaper of the governing Communist Party, People’s Daily, was first to report the steps China planned to take in response to the European Union slapping tariffs on Chinese electric vehicles last year.

Trump’s announcement left Beijing with less than a week to come up with countermeasures or strike a deal.

The proposed extra levies also coincide with the start to China’s annual parliamentary congress, a political set piece event at which Beijing is expected to roll out its 2025 economic priorities.

Beijing still hoping for trade truce

Analysts say Beijing still hopes to negotiate a truce with the Trump administration, but with no signs of any trade talks yet the prospect of a rapprochement between the two economic giants is fading.

“A China-US trade war is not inevitable, but Trump’s decision to impose tariffs now is a bad decision,” Wang Dong, executive director of the Institute for Global Cooperation and Understanding at Peking University, said.

“Trump and his advisers may think that imposing tariffs at this time is to put pressure on China, sending a signal, but this will backfire and China will inevitably respond strongly.”

Tit-for-tat tariffs between the two countries during Trump’s first term set off a full-blown trade war, upending financial markets and hurting global growth.

This time around, Trump’s first salvo of fentanyl-related import duties on February 4 was met by a quick retaliatory move by Beijing.

China announced a series of wide ranging countermeasures targeting US businesses including Google and the owner of fashion brand Calvin Klein, and fresh import duties on US coal, oil and some autos.

China’s commerce ministry said on Friday that it hoped to return to negotiations with the US as soon as possible, warning that failure to do so could trigger retaliation.

State media said top Chinese Communist Party officials met the same day and vowed to take steps to prevent any external shocks to China’s economy.

The Politburo meeting comes a week after the White House released an America First investment memorandum which placed China on a list of “foreign adversaries.”