China targets US agricultural products over Trump tariff threat: Report
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US President Donald Trump has threatened China with a cumulative 20 per cent tariff since he took office.
PHOTO: REUTERS
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BEIJING – China has American agricultural exports in its cross hairs as it prepares countermeasures against fresh US import tariffs, China’s state-backed Global Times reported, raising the prospect of an all-out trade war between the world’s top two economies.
US President Donald Trump last week threatened China
“China is studying and formulating relevant countermeasures in response to the US’ threat of imposing an additional 10 per cent tariff on Chinese products under the pretext of fentanyl,” Global Times reported on March 3, 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.
The US has long been vulnerable to China using its agricultural products as a punching bag in times of trade tensions.
China remains the biggest market for US agriculture products despite a decline in imports since 2018, after Beijing slapped tariffs of up to 25 per cent on soya beans, beef, pork, wheat, corn and sorghum in retaliation for duties on Chinese goods imposed by Mr Trump.
“Despite a decline in imports since 2018, any tariffs on key US agricultural products like soya beans, meat and grains could have a significant impact on US-China trade, as well as US exporters and farmers,” said Ms Genevieve Donnellon-May, a researcher at Oxford Global Society.
“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.”
The world’s top agricultural importer and second-largest economy brought in US$29.25 billion (S$39.5 billion) worth of US agriculture products in 2024, a 14 per cent drop from a year earlier, extending a 20 per cent 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 in 2024.
Mr 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 meeting of Parliament, a political set piece event at which Beijing is expected to roll out its 2025 economic priorities.
Trump tariffs to ‘backfire’
Analysts say Beijing still hopes to negotiate a truce with the Trump administration, but with no signs of any trade talks, 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,” said Mr Wang Dong, executive director of the Institute for Global Cooperation and Understanding at Peking University.
“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 Mr Trump’s first term set off a full-blown trade war, upending financial markets and hurting global growth.
This time around, Mr Trump’s first salvo of fentanyl-related import duties on Feb 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 Feb 28 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”. REUTERS
