China Prepares Countermeasures Against US Tariffs as Trade Tensions Escalate

China is preparing to retaliate against fresh US import tariffs, targeting American agricultural exports, as trade tensions between the two nations continue to escalate, with a 10% duty set to take effect on Tuesday. China is preparing countermeasures against fresh US import tariffs that are set to take effect on Tuesday, China’s state-backed Global Times reported, with American agricultural exports likely to be targeted. The US has long been vulnerable to China targeting its agricultural exports in times of trade tensions. China remains the biggest market for US agriculture products despite a decline in imports since 2018 when Beijing placed tariffs of up to 25% on soya beans, beef, pork, wheat, corn, and sorghum in retaliation for duties on Chinese goods imposed by Trump. The world’s top agricultural importer and second-largest economy brought in $29.25bn of US agriculture products in 2024, a 14% drop from a year earlier. Donald Trump last week threatened China with an extra 10% duty, resulting in a cumulative 20% tariff, while accusing Beijing of not having done enough to halt the flow of fentanyl into America, something China said was tantamount to “blackmail”. The proposed extra levies also coincide with the start of China’s annual meeting of parliament, a political set-piece event at which Beijing is expected to roll out its 2025 economic priorities. 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 is fading. A trade war is not inevitable, but Trump’s decision to impose tariffs now is a bad decision, according to Wang Dong, executive director of the Institute for Global Cooperation and Understanding at Peking University. Chinese manufacturers reported an uptick in orders in February as importers rushed to beat higher US tariffs imposed by President Donald Trump, as a Chinese state media report said that Beijing was considering ways to retaliate. The Global Times, a newspaper of China’s ruling Communist Party, said Monday that Beijing was studying both tariffs and non-tariff moves to counter Trump’s higher tariffs. Asked about that report, Foreign Ministry spokesman Lin Jian said that “China will take all necessary measures to firmly safeguard own legitimate rights and interests.” The stronger-than-expected data came as Chinese leaders gathered in Beijing for the annual session of the National People’s Congress, where lawmakers are expected to endorse policies and priorities set by the ruling Communist Party, which could include some fresh help for the economy as it slows to annual growth many economists forecast will fall to about 4.5% this year. Surveys of factory managers showed China’s official purchasing managers index rose to 50.2% from 49% in January, though that was just above the 50 level that marks the break between contraction and expansion. The new orders index rose to 51.1. Steady industrial production suggests that government spending and “front running” to beat the higher tariffs supported stronger business activity last month, Zichun Huang of Capital Economics said in a report. However, growth still looks at risk of slowing this quarter, at least partially reversing the pick-up in Q4, and that’s before the hit from tariffs is felt in earnest. Premier Li Qiang will present an annual work report to the congress as it opens on Wednesday that traditionally provides the annual growth target for this year, among other policies and economic updates, including efforts to boost exports and targeted spending increases.