China is contemplating retaliatory measures against US agricultural and food products in response to the Trump administration’s tariffs set to take effect on Tuesday. The retaliatory actions could involve a combination of tariffs and non-tariff measures, the Communist Party-aligned news outlet reported on Monday, citing an anonymous source. It is often used to communicate China’s stance to the international community, did not offer specific details on the proposed actions.
The looming trade conflict has already had an impact on markets, driving the price of Chinese soymeal—used in food and animal feed—up by nearly 3%, marking the biggest increase in over three weeks. Any disruption to US soybean shipments could further constrain the market.
President Donald Trump has vowed to increase tariffs on Chinese goods to 20%, with additional tariffs on Canada and Mexico slated for March 4. China, the world’s largest importer of soybeans, typically uses the beans to produce cooking oil and animal feed, critical for the country’s substantial pig farming industry.
In retaliation to Trump’s initial tariffs last month, China imposed levies on a range of US goods, including metals, liquefied natural gas, and agricultural machinery, but refrained from targeting crops directly. However, China’s soymeal market has already been tightening this year as local commercial crushers hesitated to purchase US soybeans due to trade uncertainties, while Chinese customs authorities delayed some shipments to support domestic industries.
During Trump’s first term, China implemented heavy tariffs on US farm products like soybeans, causing a dramatic 80% drop in soybean sales from the US to China over two years. In response, China has increasingly turned to Brazil for its soybean supply.
Despite this shift, the US remains a vital supplier of grains such as wheat and corn to China. On Last Friday, a spokesperson for China’s Ministry of Commerce reaffirmed the country’s intent to “counter with all necessary measures to defend its legitimate rights and interests” in the face of the new tariffs.
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