China Escalates Trade Retaliation by Halting U.S. Soybean and Log Imports

On Tuesday, Chinese authorities increased trade tensions with the United States by suspending soybean import licenses belonging to three prominent U.S. companies and stopping the importation of American logs. These measures came directly after the U.S. imposed additional tariffs on Chinese goods, signifying a fresh escalation in the ongoing trade dispute.

CHS Inc., a farmer-owned cooperative; Louis Dreyfus Company Grains Merchandising LLC, a significant global grain exporter; and EGT, a prominent export grain terminal operator partially owned by Bunge Global. Chinese customs stated that the soybean imports licensed to these companies contained contaminants, specifically ergot and seed coating agents. Furthermore, U.S. log imports reportedly contained pests including small worms and aspergillus fungus.

This retaliation was spurred by the Trump administration's recent increase of tariffs against China by an extra 10%, bringing the cumulative tariff rate to 20%. The move by Washington aimed to pressure China due to perceived insufficient action in addressing drug flows. Trump also indicated intentions to possibly impose a 25% tariff on imported lumber products after initiating a focused trade investigation into imported lumber on March 1.

Given that approximately half of U.S. soybean exports, valued near $12.8 billion in 2024, are destined for China, this move could significantly impact American agriculture. According to Chinese customs data, China was also a major destination for U.S wood products, importing around $850 million worth of logs and rough wood in 2024.

Additionally, China has imposed fresh levies on various U.S. agricultural imports totaling around $21 billion, including a 15% tariff on products such as chicken, wheat, corn, and cotton, and a 10% additional levy aimed at pork, beef, dairy, aquatic products, fruits, vegetables, sorghum, and soybeans, effective from March 10. Analysts highlight that China's choice of targeting soybean and lumber imports aligns strategically with historic phytosanitary-related trade measures, providing a convenient rationale for retaliation while reflecting their natural susceptibility to pests and disease.

Since the trade disputes under the Trump administration in 2018, China has actively worked to lessen its dependence on American agricultural commodities. Through enhanced cooperation with South American suppliers, expanded domestic production capacity, and innovative agricultural technologies, Beijing now positions itself to enforce harsher restrictions against U.S. imports with minimal impact on its own food supply. This shifting power dynamic suggests that China's agriculture sector may remain resilient, while U.S. farmers could experience significant economic pressure from ongoing retaliatory actions.