Chinese tariffs on a wide array of U.S. agricultural products took effect Monday as Beijing remains defiant in the face of U.S. pressure — while urging Washington to come to the negotiating table.
China’s decision to impose tariffs of up to 15 percent on products including corn, soybeans and beef starting Monday targets some of the United States’ most important exports to the world’s second-largest economy.
The retaliation against President Donald Trump’s move to raise tariffs on all Chinese goods to at least 20 percent marks another escalation in a mounting trade battle that has no end in sight.
Behind the rapid-fire actions and public bravado, however, Beijing is eager to strike a deal and has been scrambling to find out what Trump wants, whom to speak to and whether it can avert serious damage to its slowing economy.
“There’s just overall confusion about the Trump administration’s real intentions, whether it’s genuinely seeking a deal or simply going to escalate tensions,” said Patricia Kim, a fellow at the Brookings Institution, who has met with visiting Chinese academics looking to understand the new administration. “They want to know what kind of deal Trump is looking for and what his end game is.”
The problem for Beijing is that, under its highly centralized political system, only Chinese leader Xi Jinping could secure a deal to end the tensions.
But — unlike the leaders of Canada and Mexico — Xi has not had a conversation with Trump in his second term. That might be because Xi is unlikely to risk direct negotiations until he is certain of results, Chinese experts said — and Trump’s unpredictability makes that difficult.
China will be looking for “a sense of certainty in the negotiation protocols and concrete projects or deals” before engaging at the top level, said Zha Daojiong, a professor of international political economy at Peking University in Beijing.
“Neither side has really ascertained a go-to person for working-level conversations,” Zha said.
Wang Wentao, the Chinese commerce minister, said last week that he hoped his team could “begin communication as soon as possible” with their U.S. counterparts. Top Trump administration officials, including Treasury Secretary Scott Bessent and Secretary of State Marco Rubio, have had initial calls with their Chinese counterparts.
But Beijing doesn’t appear to have found a direct line to the president, despite searching for what Chinese experts like to call a “new Kissinger.”
This is a stark contrast to the trade war of Trump’s first term, when China tried to reach a deal, in part using a back channel to Trump via his son-in-law, Jared Kushner.
In the meantime, Beijing has sent unofficial delegations of academics and experts to Washington to parse Trump’s true priorities when it comes to China.
That’s a sign that reaching a deal is important to Beijing, said Bonnie Glaser, an analyst at the German Marshall Fund in Washington.
“Beijing likely wants to avoid more instability and unpredictability in the U.S.-China relationship that could have unforeseen consequences for Chinese interests,” she said.
In public, Beijing has struck a defiant tone, showing its readiness to match the United States blow for blow.
Monday’s tariffs target the United States’ agriculture sector. China is the largest market for American farm products, importing almost $20 billion in chicken, pork, cotton and the other goods that will be subject to the new tariffs last year, according to data from the U.S. Department of Agriculture.
Beijing also placed export controls and trade restrictions on more than 20 U.S. companies. It moved to restrict imports of gene-sequencing technology from American biotech company Illumina and an investigation into whether an American fiber optics company was skirting Beijing’s earlier anti-dumping measures.
But despite these measures, China has relatively few cards to play given that it runs an enormous trade surplus — approaching $300 billion last year — with the United States.
Complicating matters further, China’s economy is also is struggling. In addition to weak spending and high unemployment, China is experiencing stubborn deflation. Data on Sunday showed consumer prices dropped further in February, falling 0.7 percent from a year earlier.
That worries many on the front lines of the trade war. Numerous Chinese exporters and manufacturers have bet heavily on selling to the United States, building their businesses around the particular needs of American consumers.
Nearly 15 percent of Chinese exports went to the United States last year, according to official customs data. While that was down from just over a fifth in 2018, the United States is still the largest single destination for Chinese products.
Analysts estimate that a major slump in U.S. sales could ripple through the Chinese economy and knock a few percentage points off growth, which has been struggling to meet Beijing’s annual target of about 5 percent.
The impact of the trade war is already being felt on the ground.
Tian Yong, the founder and chief executive of Foodie Pet, a Jinan-based maker of premium dog and cat treats, is bracing for a loss of American customers, who account for about a third of his sales.
Tian is determined not to cut prices. Instead, he plans to weather tariffs by moving faster to release dozens of products every year.
“Our pet culture is not so deep, but when it comes to innovation, the United States is not as good as us,” he said while in the capital this month to sell “grassland rabbit spareribs” and “chicken and orange” flavored chews to middle-class Beijingers.
There are more pet lovers in China today than when Tian started out three decades ago, but the United States remains his top target market.
Alex Zhu, who sells soft toys to major American brands, said the 20 percent duties have all but wiped out profits for his confirmed orders, putting 3,000 employees at risk.
While Zhu’s main concern now is remaining profitable while keeping costs low for American consumers, he fears major buyers will soon decide the political risks of manufacturing in China are too great.
“If the only consideration was cost, we would probably be fine,” he said, adding it would be “dangerous” for his business if U.S. companies give up on Chinese suppliers.
This pressure on exporters — and the wider economy — will make it ever more necessary for Beijing to reach a deal with the Trump administration, analysts say.
It has already offered some olive branches.
On the same day as hitting back against tariffs, Chinese authorities released a white paper claiming that law enforcement agencies were cracking down on the production and shipment of fentanyl-related substances — the main reason Trump says he imposed the tariffs.
That underscores Beijing’s carrots-and-sticks approach, analysts said.
“Of course, we want to make a deal, you know? I mean, we don’t like tariffs. We don’t like trade wars,” said Wu Xinbo, an international relations scholar at Fudan University in Shanghai. “However, if the U.S. wants to impose it on China, then we have to respond.”
