China hits US agriculture, says won’t be bullied by fresh Trump tariffs

China on Tuesday swiftly retaliated against fresh U.S. tariffs, announcing hikes to import levies covering $21 billion worth of American agricultural and food products, moving the world’s top two economies a step closer towards an all-out trade war.

Beijing also placed twenty five U.S. firms under export and investment restrictions on national security grounds, but refrained from punishing any household names, as it did when it retaliated against the Trump administration’s February 4 tariffs.

In a press conference, China’s foreign ministry said the country has never succumbed to bullying or coercion, and that “trying to exert extreme pressure on China is a miscalculation and a mistake.”

China’s latest retaliatory measures came as the extra 10% duty U.S. President Donald Trump threatened the world’s second-largest economy with last week entered into force at 0501 GMT on March 4, resulting in a cumulative 20% tariff in response to what the White House considers Chinese inaction over drug flows.

China has accused the White House of “blackmail” over its tariff hike, saying it has some of the world’s toughest anti-drug policies.

Analysts say Beijing still hopes to negotiate a truce with the Trump administration, deliberately setting its tariff hikes below 20% to leave Chinese negotiators room to hash out a deal, but each escalation reduces the chance of a rapprochement.

“China’s government is signalling that they do not want to escalate,” said Even Pay, agriculture analyst at Trivium China.

“It’s fair to say we’re in the early days of Trade War 2.0,” Pay added, noting that there is still time to avoid a protracted trade war if Trump and Chinese President Xi Jinping are able to strike a deal.

The new U.S. tariffs represent an additional hike to preexisting levies on thousands of Chinese goods.

Some of these products bore the brunt of sharply higher U.S. tariffs under former president Joe Biden last year, including a doubling of duties on Chinese semiconductors to 50% and a quadrupling of tariffs on Chinese electric vehicles to over 100%.

The 20% tariff will apply to several major U.S. consumer electronics imports from China that were previously untouched, including smartphones, laptops, videogame consoles, smartwatches and speakers and Bluetooth devices.

China responded immediately after the deadline, announcing it will impose an additional 15% tariff on U.S. chicken, wheat, corn and cotton and an extra 10% levy on U.S. soybeans, sorghum, pork, beef, aquatic products, fruits and vegetables and dairy imports from March. 10.

The additional levies will hit about 15% of U.S. exports to China or $21 billion worth of trade, according to Reuters calculations based on U.S. customs data for 2024.

Beijing also added 15 U.S. companies to its Export Control List, which prohibits Chinese firms supplying American companies with dual-use technologies, and 10 American companies to its Unreliable Entity List for selling arms to Taiwan, which China claims as its own territory.

“We’re still on track to 60% (tariffs),” said Cameron Johnson, supply chain expert at Tidalwave Solutions, referring to Trump’s campaign trail threat.

“At the moment, with 20%, it just barely moves the needle for companies wanting to move potential supply chains out of the country,” he added. “At 35%, we start to see that companies will start to move or consider other strategies.”