Minutes after President Trump’s latest tariffs took effect, the Chinese government announced on Tuesday that it would impose its own broad tariffs on food imported from the United States and essentially halt sales to 15 American companies.
China’s Ministry of Finance implemented tariffs of 15 percent on imports of American chicken, wheat, corn, and cotton, with a 10 percent tariff on other foods, including soybeans and dairy products. Additionally, the Ministry of Commerce stated that 15 U.S. companies would no longer be allowed to purchase products from China without special permission, targeting firms such as Skydio, the largest American drone manufacturer.
Lou Qinjian, a spokesperson for China’s National People’s Congress, criticized the United States for violating World Trade Organization (WTO) rules, asserting that unilateral tariffs have disrupted the security and stability of global supply chains.
President Trump has maintained that these tariffs are necessary to combat the flow of fentanyl, a synthetic opioid responsible for numerous overdose deaths in the U.S. However, Lin Jian, a representative of China’s Ministry of Foreign Affairs, warned that the U.S. tariffs would significantly hinder counternarcotics cooperation.
Since taking office, President Trump has applied additional tariffs on nearly all goods from China, with a total of 20 percent tariffs now in effect. He also enacted 25 percent tariffs on Mexico and Canada on the same day.
China previously responded to earlier tariffs by implementing additional tariffs on liquefied natural gas, coal, and farm machinery from the U.S., but these had a limited impact, covering only a small fraction of American exports to China. The recent tariffs, however, represent a more comprehensive response, significantly impacting American agricultural markets.
Historically, China's retaliation to tariffs has included targeting American soybeans, which led to a shift in purchasing to Brazil. Despite hopes of political repercussions for Trump in the U.S., there was little evidence of such an impact during the 2018 Senate elections in key soybean-exporting states.
China is exploring alternative trade strategies, including restrictions on exports of critical minerals used in technology production. However, such actions carry risks, as China aims to attract foreign investment and stabilize its economy amid a real estate downturn.
In addition to limiting business for 15 American companies, China added another 10 firms to its “unreliable entities list,” restricting their operations in China. Some of the penalized companies are military contractors, alongside the biotechnology firm Illumina, accused of discriminatory practices.
Chinese market regulators have initiated antitrust investigations against companies like Google, which has been banned from China for over a decade, indicating a broader strategy amidst trade tensions.
Lou indicated that China seeks closer trade relations with Europe, despite existing disputes in various sectors. European leaders are cautious about the influx of Chinese exports as China expands its manufacturing capabilities.
During his second term, President Trump has escalated tariffs at a faster rate than in his first term, affecting approximately $440 billion in imports from China. The average tariffs on Chinese goods have now reached 39 percent, significantly higher than prior to his administration.
Unlike previous strategies, some Chinese exporters have navigated tariffs by relocating assembly processes to countries like Vietnam, while others have utilized a de minimis exception to minimize tariff impacts through smaller shipments.
In early February, Trump attempted to impose restrictions on this de minimis exemption, but implementation was delayed to prevent logistical issues.
Wu Xinbo, a scholar at Fudan University, suggested that China’s retaliatory measures are intended to communicate to the Trump administration that unilateral tariffs are ineffective and that negotiations are necessary for resolution.