On Tuesday, China imposed tariffs of up to 15 percent on a wide range of U.S. farm products, while simultaneously blacklisting over 20 American companies. This significant move marks a considerable escalation in the ongoing trade war between the world’s two largest economies, the United States and China. The newly implemented tariffs specifically target some of the United States’ primary exports to China, such as soybeans, meat, and grains.
This action comes in direct retaliation to President Donald Trump’s announcement that he would increase tariffs on Chinese products by an additional 10 percentage points. This adjustment brings the total tax on certain Chinese imports to a staggering 45 percent. While Trump initially stated he did not expect a significant retaliation from Beijing, the response was swift. Hours later, China’s State Council announced a 15 percent tax on various U.S. goods, including chicken, wheat, and corn.
In addition to the 15 percent levy, other American products will be subject to a 10 percent tariff. These products include soybeans, sorghum, beef, pork, seafood, dairy products, and a variety of fruits and vegetables. The blacklisting of 15 U.S. companies, which includes notable names like Leidos and General Dynamics Land Systems, restricts them from importing goods that can be utilized for military purposes. An additional 10 American companies face restrictions on trading with or investing in China.
Lin Jian, a spokesman for China’s Ministry of Foreign Affairs, emphasized on Tuesday that if Washington “insists on starting a tariff war, a trade war, or any kind of war, China will fight to the last.” This statement underscores the seriousness of the ongoing trade conflict, which has seen both countries engaging in aggressive economic measures.
China is the largest market for American farm products, accounting for approximately 17 percent of total U.S. agricultural exports in 2023, according to data from the U.S. Department of Agriculture. In the previous year, China imported nearly $20 billion worth of soybeans, corn, cotton, and other U.S. agricultural products that will now be adversely affected by the new tariffs. These products represented about 80 percent of all U.S. agricultural exports to China.
The roots of this trade war trace back to the early days of Trump’s return to the White House, escalating quickly and involving not just China but also U.S. trading partners. In February, Trump imposed 25 percent levies on Canadian and Mexican goods, which were postponed after discussions with leaders from those countries. The tariffs are set to take effect on March 10 and could affect billions of dollars' worth of U.S. goods.
In response to Trump’s tariffs, China had previously imposed 15 percent tariffs on U.S. coal and liquefied natural gas, along with a 10 percent tax on agricultural equipment and crude oil. They also initiated an antitrust investigation into Google and blacklisted two additional U.S. companies. Analysts noted that initially, China’s response was relatively restrained, as it targeted select products. This indicated that Chinese leader Xi Jinping, amid a slowing economy and public discontent, might be open to negotiating a trade deal with Trump.
However, the recent announcements from both sides raise concerns of a continuous cycle of retaliatory tariffs, with experts warning that Trump is intensifying his approach. Zhu Feng, director of the Institute of International Studies at Nanjing University, stated, “The trade war is a huge disruption and blow to the normal economic and trade relations between China and the United States, and it will certainly bring new and significant pressure to China’s economy and development.”
While leaders from Canada and Mexico have engaged in talks with the U.S. president to forge agreements, there has been no such dialogue between Xi and Trump. Although high-ranking officials, including Treasury Secretary Scott Bessent and Secretary of State Marco Rubio, have communicated with their Chinese counterparts, Trump suggested earlier this month that he was in no rush to converse with Xi.
During his first term, Trump imposed tariffs on Chinese goods in an effort to diminish the trade surplus that China holds over the United States. This resulted in a two-year trade war characterized by retaliatory economic actions. A deal struck in 2020 saw China commit to purchasing an additional $200 billion in U.S. goods over two years, but it ultimately failed to meet those commitments.
As the new U.S. measures lead to tariffs as high as 45 percent on certain Chinese products, Chinese state media have indicated that Beijing is preparing for an extended trade conflict by seeking new export markets and implementing domestic stimulus measures. This shift aims to reduce reliance on U.S. imports, although ordinary citizens in China may experience the repercussions of rising prices amid a slowing economy.
In conclusion, as the trade war escalates, experts believe that China’s main focus is to stabilize its internal situation while waiting for the U.S. to propose a resolution before engaging in a more challenging confrontation. The evolving dynamics of this trade conflict will likely have lasting implications for both economies in the years to come.
