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China preparing response to fresh US tariffs, Global Times

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American agricultural exports likely to be hit

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China remains biggest market for U.S. agricultural exports

(Adds analyst comment in paragraphs 7-9)

By Joe Cash, Mei Mei Chu and Xiuhao Chen

BEIJING, March 3 (Reuters) - China has American

agricultural exports in its cross hairs as it prepares

countermeasures against fresh U.S. import tariffs, China's

state-backed Global Times reported, raising the stakes in an

escalating trade war between the world's top two economies.

U.S. President Donald Trump last week threatened China with

the extra 10% duty set to take effect on Tuesday, resulting in a

cumulative 20% tariff, and accused Beijing of not doing enough

to halt the flow of fentanyl into America, which China said was

tantamount to "blackmail."

"China is studying and formulating relevant countermeasures

in response to the U.S. threat of imposing an additional 10%

tariff on Chinese products under the pretext of fentanyl,"

Global Times reported on Monday, citing an anonymous source.

"The countermeasures will likely include both tariffs and a

series of non-tariff measures, and U.S. agricultural and food

products will most likely be listed," the report added.

China's commerce ministry and the U.S. embassy in Beijing

did not immediately respond to requests for comment.

China is the biggest market for U.S. agricultural products,

and the sector has long been vulnerable to being used as a

punching bag in times of trade tensions.

"Despite a decline in imports since 2018, any tariffs on key

U.S. agricultural products like soybeans, meat and grains could

have a significant impact on U.S.-China trade as well as U.S.

exporters and farmers," said Genevieve Donnellon-May, a

researcher at the Oxford Global Society.

"The U.S. 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 $29.25 billion worth of U.S agriculture

products in 2024, a 14% drop from a year earlier, extending a

20% 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 last year.

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

yet the prospect of a rapprochement between the two economic

giants is fading.

"A China-U.S. trade war is not inevitable, but Trump's

decision to impose tariffs now is a bad decision," said Wang

Dong, executive director of the Institute for Global Cooperation

and Understanding at Peking University.

"Trump and his advisors 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 Trump's

first term set off a full-blown trade war, upending financial

markets and hurting global growth.

This time around, 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 U.S. businesses including Google and the

owner of fashion brand Calvin Klein, and fresh import duties on

U.S. coal, oil and some autos.

China's commerce ministry said on Friday that it hoped to

return to negotiations with the U.S. 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."