China has taken significant steps to escalate its trade tensions with the United States, imposing new tariffs and targeting major American corporations. On March 4, 2025, China announced duties of up to 15% on key U.S. agricultural products like chicken, wheat, corn, and cotton, as part of its retaliatory response to President Donald Trump’s recent tariff hike.
These tariffs also include a 10% duty on imports of other staples like sorghum, soybeans, pork, beef, and various fruits and vegetables. According to the U.S. Department of Agriculture (USDA), China comprised 17% of U.S. agricultural exports last year, making it the largest market for American farm products. A USDA study suggests exports to China are projected to drop by $1.3 billion this year due to rising competition.
“We don’t want this,” Canadian Prime Minister Justin Trudeau told the American public during his remarks reflecting concerns over the potential repercussions. “Your government has chosen to do this to you.” He warned of impending inflation and rising costs for U.S. consumers, attributing these developments directly to Trump’s actions against Canadian goods.
On the same day, Trump increased tariffs on imports from China to 20%, maintaining previous restrictions enacted earlier this year. This uptick is purportedly aimed at countering China’s failure to curb the flow of fentanyl to the U.S. Per Trudeau’s analysis, “Because of the tariffs imposed by the U.S., Americans will pay more for groceries, gas, and cars, and potentially lose thousands of jobs.”
Compounding matters, the U.S. also enforced tariffs of 25% on most goods from Mexico and Canada as of March 4, with exemptions for energy products intended to keep gas prices manageable. Trudeau reacted strongly against these tariffs, noting, “Tariffs will disrupt an incredibly successful trading relationship.”
China's Ministry of Commerce has also targeted 15 U.S. companies, including the drone manufacturer Skydio and Illumina, the leading biotech firm known for its gene-sequencing machines. These actions constitute part of China’s increasingly aggressive stance, particularly as it barred Illumina from importing gene-mapping products, which make up about 7% of the company's sales.
Lin Jian, spokesperson for China’s Foreign Ministry, asserted, “If the U.S. has other agenda in mind and if war is what the U.S. wants, be it a tariff war, trade war, or any other type of war, we’re ready to fight till the end.”
The punitive measures reflect China’s determination to safeguard its economy amid mounting pressures from U.S. trade policies. To support its national interests, China has instituted anti-dumping duties on U.S. companies exporting optical fibers, with tariffs ranging from 33.3% to 78.2%, signaling Beijing's readiness to hit back more assertively.
Wendon Zhang, Professor of Applied Economics at Cornell University, warned of serious long-term effects, estimating Trump’s tariffs could result in a 0.4% loss to the U.S. gross domestic product, translating to significant financial impacts, potentially upwards of $100 billion.
Notable actions on the U.S. side included the immediate imposition of tariffs on $155 billion worth of Canadian goods by Trudeau, affecting $30 billion worth of products straightaway. Similar discussions among Canadian premiers are poised to follow suit, promising retaliation against U.S. imports.
President Claudia Sheinbaum of Mexico elaborated on her country’s response, mentioning several contingency plans to counter the U.S. tariffs, though specific details remained undisclosed.
Illumina, having been recently placed on China's unreliable entity list due to its perceived wrongdoings against Chinese companies, has stated it will continue to abide by local laws. The momentous ban on its gene sequencers came shortly after U.S. tariffs were raised, intensifying the sense of urgency among American businesses operating within China.
China's broader strategy appears to extend beyond mere industry retaliation, aiming to leverage its quick response against U.S. sanctions to send shockwaves through American corporate sectors. By banning Illumina, the world leader in gene-sequencing technology, Beijing is sending clear signals to other American firms about the risks involved with maintaining operations there.
“For China, the ultimate scenario would be total reduction of trade hostilities with the U.S.,” observed Joe Mazur, analyst at Trivium, stressing the mounting stakes for all players involved. “That is not going to happen, and so the only thing they can do right now is make an example of a handful of companies.”
Despite these setbacks, American companies look to adapt and navigate the tumultuous waters of trade, often eyeing the changing competitive landscapes with their Chinese counterparts. While some rivals, like MGI and BGI, stand to benefit from Illumina's losses, the tangled web of economic relations continues to evolve under the pressures of this unprecedented trade war.
It remains unclear how far each side is willing to push before reaching some equilibrium, as mounting tariffs and countermeasures seem destined to complicate or even fracture trade ties fundamentally between the U.S. and China.
This turbulent backdrop will not only dictate the future of American corporations and their international partners but could also redefine the global trading system over the next decade, cementing the importance of proactive diplomatic engagement to ease tensions.