China swiftly retaliated against new tariffs from the Trump administration on Tuesday, showing Beijing isn’t in a hurry to reach a deal on the trade war.
The new measures from Beijing came within an hour of US tariffs against Chinese goods, which doubled from 10% to 20% at 12:01 a.m. ET on Tuesday, the same time new tariffs came in against goods from Mexico and Canada.
In retaliation against the levies, Beijing announced additional tariffs of 10% to 15% on some US imports starting March 10.
They include 10% tariffs on US soybeans, pork, and beef imports and 15% tariffs on chicken and cotton imports, according to the Commerce Ministry.
Beijing also targeted American farm imports into China when US President Donald Trump started the trade war in his first term.
Beijing’s speedy response on Tuesday — reminiscent of Beijing’s swift response on February 4 against the US’s first tranche of tariffs — is an indication that Xi Jinping’s administration was prepared for the moves.
Markets in Asia were broadly lower early on Tuesday because of worries over the impact of the trade war. But losses were limited as investors were already prepared, analysts said.
Japan’s Nikkei 225 closed 1.2% lower after falling by as much as 2.7%. Hong Kong’s Hang Seng Index closed 0.3% lower, and China’s CSI 300 ended little changed.
US stock futures retreated Tuesday with the Dow Jones Industrial Average falling 0.3%, S&P 500 dropping 0.8%, and Nasdaq 100 sliding 0.9%. Shares of Nike, Intel, and Estée Lauder were all down around 1.5% in premarket trading, likely reflecting the trio’s significant reliance on the Chinese market.
China’s measures also appeared contained, Gary Ng, a senior economist at Natixis, told Business Insider. He said Beijing stuck to its “playbook of retaliation,” similar to the moves it used on February 4. Last month, the country announced tariffs on some US goods and imposed export controls and market access restrictions on select companies.
Jun Rong Yeap, a market strategist at IG, an online trading provider, told BI that Beijing’s agriculture-focused response still appeared to be more about posturing than about causing significant disruptions to the wider economy.
“We need to keep in mind that the US imposed tariffs on all China’s exports, while China only retaliated on a small share of US exports to China,” wrote Zhiwei Zhang, the president and chief economist at the Hong Kong-based firm Pinpoint Asset Management, in a note on Tuesday.
Still, Zhang is sounding caution over investor complacency.
“I think the market underestimates the potential damage of trade wars on the global economy,” he wrote.
Separately, Beijing announced on Tuesday that it was banning the California-based biotech firm Illumina from selling gene sequencing products in China to “safeguard national sovereignty, security and development interests.”
Beijing also added 10 US companies to a list of unreliable entities and imposed dual-use item export controls on 15 US entities.
DeepSeek confidence is buoying China
China’s markets have recently been supported by renewed interest in its tech stocks following DeepSeek’s meteoric rise.
At a press briefing on Monday, Scott Kennedy, a China specialist at the Center for Strategic and International Studies, said China felt it was in a “much better position” than during Trump’s first term in office. Because of significant tech advances, Beijing is not “desperate” for a Trump deal, he said.
“If they’re going to reach a deal, they want it to benefit China and not just be a one-way list of concessions from Beijing to Washington,” Kennedy said.
Trump is doubling down on tariffs just as Beijing holds its annual political meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference known as “Two Sessions.”
Investors are watching for signs that China will step up stimulus measures amid heightened trade tensions, a prolonged economic downturn at home, and weak domestic consumption.
Chinese Premier Li Qiang is expected on Wednesday to deliver the government work report that’s set to detail top policy priorities and reveal China’s 2025 GDP growth target.
Canada responds with its own tariffs
Canada would respond with 25% tariffs “against $155 billion of American goods,” the country’s prime minister announced Monday evening.
Justin Trudeau said tariffs on “$30 billion worth of goods” would take effect simultaneously with the US tariffs.
He added that “tariffs on the remaining $125 billion on American products” would follow in 21 days.
“Canada will not let this unjustified decision go unanswered,” Trudeau said, adding, “Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures.”
Mexico moves
Mexico’s President, Claudia Sheinbaum, said on Tuesday there was no justification for the US move and that would announce “tariff and non-tariff measures” on Sunday.
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