China eyeing U.S. farm exports for retaliation, report says, as importers rush to beat tariffs

BANGKOK (AP) — Chinese manufacturers reported an uptick in orders in February as importers rushed to beat higher U.S. tariffs imposed by President Donald Trump, as a Chinese state media report said that Beijing was considering ways to retaliate.

Trump earlier imposed a tariff of 10% on imports from China and that will rise to 20% beginning Tuesday. He also ended the “de minimis” loophole that exempted imports worth less than $800 from tariffs, in a blow to companies whose online sales direct to consumers had soared in recent years.

The Global Times, a newspaper of China's ruling Communist Party, said Monday that Beijing was studying both tariffs and non-tariff moves to counter Trump's higher tariffs. Asked about that report, Foreign Ministry spokesman Lin Jian said that “China will take all necessary measures to firmly safeguard own legitimate rights and interests.”

“U.S. agricultural and food products will most likely be listed,” it said, citing an unnamed source. Last week, Chinese Commerce Ministry officials had said the two sides were in a “dialogue” about trade.

The stronger-than-expected data came as Chinese leaders gathered in Beijing for the annual session of the National People’s Congress. Lawmakers are expected as usual to endorse policies and priorities set by the ruling Communist Party, which could include some fresh help for the economy as it slows to annual growth many economists forecast will fall to about 4.5% this year.

Surveys of factory managers showed China’s official purchasing managers index rose to 50.2% from 49% in January, though that was just above the 50 level that marks the break between contraction and expansion. The new orders index rose to 51.1.

Steady industrial production suggests that government spending and “front running” to beat the higher tariffs supported stronger business activity last month, Zichun Huang of Capital Economics said in a report.

“But growth still looks at risk of slowing this quarter, at least partially reversing the pick-up in Q4 (October-December). And that’s before the hit from tariffs is felt in earnest,” Huang wrote.

Another survey released Monday, the Caixin manufacturing PMI survey, showed a similar improvement. That survey tends to show trends in smaller and export-oriented companies, Lynne Song of ING Economics said in a commentary.

“This could be a valuable gauge of the impact new tariffs are having on the manufacturing sector. With an additional 10% tariff set to come into effect tomorrow, this seems likely,” she said.

Sudden increases in tariffs and other factors have raised uncertainty over the outlook for the world's second largest economy, which grew at a 5% annual pace last year, just meeting Beijing's official target.

Premier Li Qiang will present an annual work report to the congress as it opens on Wednesday that traditionally provides the annual growth target for this year, among other policies and economic updates.

2025 is the last year of leader Xi Jinping's “Made in China 2025” blueprint for upgrading Chinese industries to become global leaders in advanced technology. It also marks the end of China’s 14th five-year plan, the party's traditional mid-term policy-setting document.

A key priority is likely to be outlining ways to get Chinese consumers to spend more, a weak point in the state-dominated economy following the disruptions of the COVID-19 pandemic. The government has moved to provide more support for private industry in recent months as part of that effort. Exports and targeted spending increases have also helped.