China hits US soybean firms, halts lumber imports as it steps up retaliation against Trump tariffs

China suspended on Tuesday the soybean import licenses of three U.S. firms and halted imports of U.S. lumber, stepping up retaliatory action after the United States imposed additional tariffs on Chinese goods.

Earlier in the day, China also imposed import levies covering $21 billion worth of U.S. agricultural and food products including soybeans, wheat, meat and cotton.

The three U.S companies affected by the license suspensions are farmer-owned cooperative CHS Inc, global grains exporter Louis Dreyfus Company Grains Merchandising LLC and export grain terminal operator EGT, China's customs department said in a statement.

Customs said it detected ergot and seed coating agent in imported U.S. soybeans while the suspension of U.S. lumber imports was due to the detection of small worms, aspergillus and other pests.

Media representatives for Louis Dreyfus, CHS and Bunge Global, which partially owns EGT, did not immediately respond to requests for comment.

Beijing's retaliatory measures were in response to U.S. President Donald Trump's decision to impose an extra 10% duty on China, effective Tuesday, resulting in a cumulative 20% tariff in response to what the White House considers Chinese inaction over drug flows.

About half of U.S. soybean exports are shipped to China, totalling nearly $12.8 billion in trade in 2024, according to the U.S. Census Bureau.

The suspension of U.S. lumber was a direct response to Trump's move on March 1 to order a trade investigation on imported lumber. Trump had earlier told reporters that he was thinking about imposing a 25% tariff rate on lumber and forest products.

"The announcement of import restrictions on U.S lumber and soybeans linked with phytosanitary issues follows a long history of similar measures by Beijing," said Even Pay, agriculture analyst at Trivium China.

The bulk import volumes and natural origin of soybeans and lumber make them susceptible to issues with plant health and pests, creating a convenient target for trade retaliation, Pay said.

China is one of the world's largest importers of wood products and the third largest destination for U.S. lumber. It imported around $850 million worth of lumber products from the U.S. in 2024, according to Chinese customs data.

PUNISHING FARMERS

Additional levies imposed by China earlier on Tuesday comprised a 15% tariff on U.S. chicken, wheat, corn and cotton and an extra levy of 10% on U.S. soybeans, sorghum, pork, beef, aquatic products, fruits and vegetables and dairy imports, effective from March 10.

The suspension on the three soybean exporters on top of higher import tariffs will further restrict imports of the oilseed into China.

Beijing's concerted efforts in recent years to greatly reduce its dependence on U.S supplies has put it in a stronger position to target U.S farm goods with less impact to its food security and greater harm to U.S farmers compared to a 2018 trade war during Trump's first administration.

China has turned to South American producers, boosted agriculture cooperation with allies and raised domestic production through expanded planting and the use of technology.