China just fired back at the US with a massive round of tariffs, export bans, and legal action at the World Trade Organization (WTO), escalating an already brutal trade war between the world’s two largest economies.
The Chinese Ministry of Commerce confirmed the decision on Tuesday, after Washington’s decision to slap a new 10% tariff on all Chinese imports under the Trump administration.
China’s finance ministry rolled out 15% tariffs on US chicken, wheat, corn, and cotton. A separate 10% tariff now applies to American sorghum, soybeans, pork, beef, seafood, fruits, vegetables, and dairy products. These new tariffs are set to take effect on March 10, hitting a wide range of US agricultural exports.
Meanwhile, China’s commerce ministry added 15 American companies to an export control list, blocking them from receiving Chinese dual-use goods—materials that can be used for both military and civilian purposes.
China cuts off US companies from key sectors
Chinese authorities also blacklisted 10 American companies by placing them on an “unreliable entity” list. According to the Ministry of Commerce, these companies are now barred from exporting, importing, or investing in China.
One of the biggest names on this list is Illumina, a biotech company specializing in gene sequencing. The Chinese government said it will prohibit Illumina from exporting gene sequencers to China, citing retaliation for Trump’s first round of tariffs back in February.
Tech companies also found themselves targeted. The US drone manufacturer Skydio and AI firm Shield AI, backed by Andreessen Horowitz, have been cut off from key Chinese exports. Without access to Chinese-made dual-use materials, both companies could face serious supply chain disruptions.
The White House’s trade war strategy is also starting to isolate US companies from important global markets. While Washington claims the tariffs are necessary to fight China’s role in the fentanyl trade, Beijing is making it clear that every move will be met with an equal, if not harsher, response.
China drags the US to the WTO over tariff hikes
Also, the Ministry of Commerce confirmed that Beijing has filed an official complaint with the WTO, saying that the US violated international trade rules by unilaterally increasing tariffs.
“China filed a complaint against the US within the framework of the WTO dispute settlement mechanism in connection with the latest increase of duties by the United States,” the ministry announced, according to TASS.
“Unilateral tariff measures of the US seriously violate WTO rules and undermine the basis of trade and economic cooperation between China and the US,” said China’s Ministry of Commerce.
China has used the WTO dispute settlement process before, and back in February, Beijing responded to a previous round of tariffs by imposing new levies on select US goods, restricting exports of key minerals, and launching an antitrust investigation into Google.
WTO Public Forum 2010. Taken on September 16, 2010. Photo: WTO/Jay Louvion.
China’s leadership braces for economic turbulence
While China’s economic defense dominates the headlines, Beijing’s top political leaders are gathering to chart the country’s economic future. On Tuesday, thousands of delegates assembled in the capital for the “Two Sessions”, China’s most important political event of the year, according to a report from CNBC.
The Chinese People’s Political Consultative Conference (CPPCC), an advisory body made up of party officials, business leaders, and legal experts, opened its meeting at 3 p.m. local time at the Great Hall of the People in Beijing. The National People’s Congress (NPC), China’s top legislature, will officially convene on Wednesday.
At the center of the discussions is Premier Li Qiang’s upcoming government work report, where he is expected to announce China’s economic growth target of around 5%.
The fiscal budget deficit is also expected to rise to 4% of GDP, up from 3% last year, as Beijing looks to stabilize the economy amid the ongoing trade war, per the report.
The week-long Two Sessions event will wrap up on March 10, followed by a press conference from Foreign Minister Wang Yi. The briefing is expected to shed light on China’s foreign policy direction, particularly how Beijing plans to properly continue fighting back against the US.
Meanwhile, inflation remains a major concern, with China set to revise its annual consumer price inflation target to around 2%—the lowest in over two decades.
