China has officially imposed tariffs on many American farm products as part of the ongoing trade war between the two largest economies. A slowing economy's effect on demand and the government's success in increasing agricultural self-sufficiency are both highlighted by China's readiness to use food as a countermeasure against the US, which has historically been one of its largest suppliers. China has introduced new agricultural tariffs ranging from 10% to 15% on various products, including grains, proteins, cotton and fresh produce. 

This follows earlier measures targeting energy and critical metals. Additionally, China has stopped importing soybeans from three U.S. companies and has halted all purchases of American timber. Separately, on Saturday, Beijing announced retaliatory tariffs on several Canadian agricultural products, which will take effect on March 20. Making sure that all 1.4 billion people have enough food remains a top priority for policymakers. China is still an important buyer of farm products from the Midwest, a region that mostly supports the Republican Party. However, after the trade war during Trump’s first presidency, China has been working to change its supply chains, which has reduced the U.S.’s influence. China’s economy has struggled to recover from the pandemic, but one positive outcome is an oversupply of food. Managing this surplus has become more urgent. 

Wheat prices in China are at their lowest in five years and corn imports have dropped sharply. New data released on Sunday shows that consumer prices are falling, mainly due to a big drop in food prices. The government is taking steps to protect its farmers by restricting imports of certain grains like barley and sorghum. Traders have been told to limit overseas purchases, and shipments of soybeans are being delayed. In recent months, China has also increased trade investigations and imposed tariffs on various imports, including rapeseed, pulses, seafood, meat, and dairy. This suggests that policymakers are not too concerned about creating barriers to imports, especially for premium products, as many households are cutting back on spending. Supporting these efforts is a record-high grain harvest, allowing the government to build up its reserves.

At its annual legislative meeting, which ends this week, China announced a higher grain production target for the year and increased its budget for stockpiling. To reduce reliance on foreign soy supplies, efforts are being made to lower the amount of soybean meal in animal feed. This reflects ongoing concerns about the vulnerability of livestock herds.

Soybeans are the top agricultural export from the U.S. to China, valued at nearly $13 billion in 2024. In recent years, China has actively sought to reduce its dependence on U.S. soybeans by turning to other suppliers, like Brazil, which is seen as a more stable trade partner. Since soybean production is seasonal, Brazil will continue to be China’s main supplier until at least the fourth quarter of the year. As a result, the 10% tariff on U.S. soybeans is unlikely to have much impact in the coming months. The government will want to boost the economy, and a big part of that will be encouraging people to spend more. If the authorities successfully stimulate the economy, food prices could go up, and import policies might shift. Extreme weather caused by climate change could also impact food production and influence decisions. Meanwhile, by focusing on American farm products, Beijing is using a powerful but relatively low-cost tool in its trade strategy.

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