Following the previous round of 10% tariffs imposed by the US on all goods originating from China, effective February 4, 2025, the US has imposed additional 10% tariffs on all Chinese goods under the International Emergency Economic Powers Act (“IEEPA”) on March 3, 2025.
In response, China announced a new series of retaliatory measures against the US the next day. Below is a summary of these measures:
10-15% retaliatory tariffs on US agricultural products
Effective March 10, 2025, these retaliatory tariffs will apply to the following products originating from the US:
- 15% tariffs on chicken, wheat, corn, and cotton
- 10% tariffs on sorghum, soybeans, pork, beef, seafood, fruit, vegetables, and dairy products
Unlike the Chinese retaliatory tariffs introduced during the first Trump Administration against the US “Section 301 tariffs”, these retaliatory tariffs cannot be waived or exempted under current regulations. Companies need to consider alternative tariff mitigation strategies when importing these products into China.
Suspension of export permits for certain US soybean producers
Effective immediately, the General Administration of Customs of China (“GAC”) has suspended the export authorization for three US soybean producers to export soybeans to China under the “foreign food producer registration” licensing regime, citing the detection of quarantine non-compliant elements in the soybeans imported from these companies.
Suspension of import of US logs
Effectively immediately, GAC has also suspended imports of all US logs, citing the detection of pests in the imported logs.
Additional sanctions designations
Effective immediately, the Unreliable Entities List Working Mechanism, an inter-ministerial working group led by MOFCOM, has added 10 additional US companies to its Unreliable Entities List (“UEL”), due to their arms sales or military technology cooperation with Taiwan. The sanctions measures applied to these entities include (i) prohibition on import and export activities involving China, and (ii) prohibition on new investment in China.
Additional restricted party designations under the Export Control Law of China (“ECL”)
MOFCOM has added 15 additional US companies to its Control List, which is China’s equivalent to the Entity List under the Export Administration Regulations (“EAR”) of the United States, citing the threat they pose to China’s national security and interests. These designations prohibit the export of any dual-use items to the designated entities without authorization.
Clarifying the sanctions measure applied to a US biotechnology company
While a US biotechnology company was added to the UEL on February 4, 2025, for allegedly adopting “discriminatory trade measures” against Chinese companies, the initial notice of designation did not specify any sanctions measures. A follow-up notice issued on March 4, 2025, clarified that the sanctions measure against this entity only includes prohibition on its export of gene sequencers to China. Other typical UEL sanctions measures, such as general bans on imports and exports and prohibition on new investments in China, are not implemented against this entity.
Anti-circumvention investigation on certain optical fibers from the US
On March 4, 2025, MOFCOM initiated its first anti-circumvention investigation under the Antidumping Regulations. The US companies involved in this investigation are exporters of certain optical fibers that have been subject to antidumping duties in China since 2011. The alleged “circumvention” relates to their export of an alternative model of optical fiber, which they have declared as outside the scope of the antidumping measures but are now alleged to be essentially identical to the fibers subject to antidumping duties. The investigation is expected to last six months and may result in antidumping duties being imposed on this alternative product model.
Frank Pan is a partner of FenXun Partners who is a premier Chinese law firm. FenXun established a Joint Operation Office with Baker McKenzie in China as Baker McKenzie FenXun which was approved by the Shanghai Justice Bureau in 2015.
