China has escalated its trade retaliation against the U.S. by suspending soybean import licenses for three American firms and halting imports of U.S. logs, citing phytosanitary concerns. The move comes in response to President Donald Trump’s decision to impose an additional 10% tariff on Chinese goods, bringing the cumulative duty to 20%.
The affected companies—CHS Inc, Louis Dreyfus Company Grains Merchandising LLC, and EGT—were cited by China’s customs department for issues such as ergot and seed coating agents in soybeans, as well as pests in logs. The suspension of U.S. log imports is also seen as a direct response to Trump’s March 1 order for a trade investigation on imported lumber.
Earlier on Tuesday, China imposed tariffs on $21 billion worth of U.S. agricultural and food products, including soybeans, wheat, meat, and cotton. The new measures include a 15% tariff on U.S. chicken, wheat, corn, and cotton, and a 10% levy on soybeans, sorghum, pork, beef, and other products, effective March 10.
China is the largest importer of U.S. soybeans, accounting for nearly half of American exports and $12.8 billion in trade in 2024. The suspension of licenses for the three soybean exporters will further restrict U.S. soybean shipments to China, compounding the impact of higher tariffs.
The U.S. lumber industry is also under pressure, as China is the third-largest destination for American forest products, importing $850 million worth of logs and rough wood in 2024.
Analysts note that China’s reliance on South American soybean producers and its efforts to boost domestic agricultural production have reduced its vulnerability to U.S. trade actions. “Beijing’s concerted efforts in recent years to reduce dependence on U.S. supplies have put it in a stronger position to target U.S. farm goods with less impact to its food security,” said Even Pay, an agriculture analyst at Trivium China.
The escalating trade tensions highlight the growing rift between the two economic powers, with U.S. farmers and exporters bearing the brunt of the fallout.