Global Times Says Beijing Preparing Countermeasures As Tariff Deadline Arrives

On Monday morning, the US dollar is underperforming against all G10 currencies as investors brace for President Trump’s tariff deadline on Mexico, Canada, and China.

US Commerce Secretary Howard Lutnick confirmed Sunday the tariffs are set for Tuesday. Meanwhile, a state-run Chinese publication signaled that retaliatory trade measures are coming, heightening concerns the trade war could escalate in the next 24 hours. 

Lutnick told Fox News: “There are going to be tariffs on Tuesday on Mexico and Canada. Exactly what they are, we’re going to leave that for the president and his team to negotiate.”

The dollar has been on a slippery slope since Sunday evening.

Late last week, Trump wrote on Truth Social that fentanyl is still being smuggled into the US at “unacceptable levels” and that tariffs on countries of origination will be the only way to stop the drug death overdose crisis that kills 100,000 Americans per year. 

“We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” Trump said, adding, ”China will likewise be charged an additional 10% Tariff on that date.”

Ahead of the escalation in the tariff war, China’s state-backed Global Times cited an anonymous source, probably a CCP official, indicating that Beijing is preparing countermeasures against US agricultural exports. 

Here’s more from the report:

In response to a question regarding a Global Times report which, citing a reliable source, said China is studying and formulating relevant countermeasures against the US’ threat of imposing an additional 10 percent tariff on Chinese products under the pretext of fentanyl, Chinese Foreign Ministry spokesperson Lin Jian said on Monday that China firmly opposes the US’ move of threatening tariffs on imports from China citing the fentanyl issue as its excuse and will take “necessary measures” to firmly safeguard its own legitimate rights and interests.

The Global Times reported on Monday that the countermeasures will likely include both tariffs and a series of non-tariff measures, and US agricultural and food products will most likely be listed, citing the source, who spoke on the condition of anonymity.

“I have stated China’s serious position on the issue,” Lin made the remarks in response to a media question seeking confirmation and comment on the Global Times report.

After US President Donald Trump said in a social media post on Thursday that the US would impose tariffs on Canada and Mexico starting on March 4, and that “China will likewise be charged an additional 10% Tariff on that date,” Lin, the spokesperson for the Chinese Foreign Ministry, said on Friday that China firmly deplores and strongly opposes the move, and will take what is necessary to resolutely defend its legitimate interests.

“If the US continues to use the fentanyl issue to pressure, blackmail, coerce and threaten China, it will only be counterproductive and deal a blow to the dialogue and cooperation between China and the US in the field of drug control,” Lin said on Friday.

Beijing’s possible tit-for-tat tariff move on US farm goods is a playbook similar to Trump’s first term in the early innings of the trade war. During that time, US soybean sales to China plunged 80% over a two-year period.

On the macro side, all of these uncertainties are building, especially on trade, which has some analysts, including ones at Goldman, warning about “growth scare & tariffs.” 

Ahead of tomorrow’s deadline, White House trade adviser Peter Navarro told CNBC earlier that he doesn’t see Trump wavering on tariffs…