China launches agricultural sanctions in response to U.S., EU electric vehicle tariffs

China is fighting import tariffs on its electric vehicles by making Western farmers pay the price.

Beijing has levied billions of dollars of agricultural sanctions against the U.S., the European Union, and Canada, after they imposed duties on Chinese EVs to protect their own automakers. China has said it will lift farm tariffs only when Western governments drop EV duties.

The trade war began in May last year when the U.S. increased tariffs on Chinese EVs from 25% to 100%. In July, Europe imposed duties between 17% and 35%, and Canada matched the U.S.’ rate the following month. While Western governments blame Chinese EV dominance on state sops and cheap labor, China’s real advantage lies in building better cars, cheaper.

“The Chinese auto market is clearly ahead of most Western countries, in terms of product uniqueness and technology,” Babak Hafezi, founder of consulting firm HafeziCapital, told Rest of World.

China’s response came in real time. In mid-2024, China began targeting agricultural products like pork and brandy in the EU, canola in Canada, and soybean in the U.S. The strategy is aimed at hurting rural farming communities, which can have significant political sway. 

“Even a slight adjustment in China’s import preferences can ripple through farming regions and rural constituencies that carry significant political weight,” Mingzhi Jimmy Xu, associate professor at Beijing’s Peking University, told Rest of World. “Without issuing any direct threats, China can therefore create powerful incentives for policymakers to reassess tariff escalation and reengage in dialogue.”

China’s tariffs on Canadian agricultural products are a countermeasure against the EV tariffs.”

In Canada, where China-made EVs account for only 2% of overall auto sales, the $4.9 billion Chinese export market is effectively closed for canola suppliers because of retaliatory tariffs.

“China’s tariffs on Canadian agricultural products are a countermeasure against the EV tariffs and the unilateral, unjustified tariffs on China’s steel and aluminum products,” Wang Di said in a CTV interview on October 11. “If Canada is ready to correct this practice, China will also respond accordingly.”

This is not the first time China has weaponized food. In 2018, Beijing levied a 178% tariff on U.S. sorghum after Washington imposed tariffs on Chinese solar panels. In 2020, Australian wine and barley faced over 200% and 80% in tariffs, respectively, after Canberra called for a Covid-19 investigation. Farm products make perfect targets because they spoil quickly and can’t wait for disputes to resolve.

“Agriculture is an easy blow: It remains the backbone of many local economies and suffers severely from tariff disputes and diplomatic fluctuations,” Maria Pechurina, director of international trade at Peacock Tariff Consulting, told Rest of World. “This has become a tried and tested move in China’s economic statecraft playbook.”

China has targeted each country’s weak spot. France had pushed hardest for EV tariffs, so Beijing slapped duties on French cognac. The Chinese market had previously accounted for roughly $1.7 billion in annual exports of cognac. Since China started collecting duties in October 2024, exports dropped by 35%.

China initiated a probe into EU pork exports in June last year. Spain, its largest producer, abstained from voting on EV tariffs. China imposed duties up to 62% on European pork in September this year.

U.S. soybean farmers face the biggest threat. China bought 27 million tons worth $12.6 billion in 2024 — more than double the combined purchase of the next-biggest buyers, the EU and Mexico. By September 2024, new crop sales to China had hit zero. The American Soybean Association has called for a trade deal, knowing no other buyer can replace China. 

“This reflects a deliberate strategy to increase bargaining leverage in ongoing trade negotiations by exerting economic pressure on the politically sensitive export sector,” said Brett Massimino, assistant professor and the chairperson of the supply chain and analytics department at Virginia Commonwealth University School of Business. “Even in cases where that linkage hasn’t been explicitly stated, the timing and nature of the tariffs make the connection clear.”

China’s countermeasures reversed in most nations after a few years of negotiations, and the same could happen with EVs, according to Xu. Still, the damage to Western producers may outlast any eventual deal.

“New contracts, logistics investments, and supply-chain infrastructure tend to lock in those alternatives, making the economic impact longer lasting than the EV tariffs that triggered them,” Xu said.

The Commission has clearly shown that it was not willing to back down from the EV case.”

Despite pressure from the agricultural sector, Western governments show no signs of retreating on EV protection. Chinese EVs are seen as both economic and security threats.

“The Commission has clearly shown that it was not willing to back down from the EV case,” Juliana Bouchaud, a senior analyst at Rhodium Group, told Rest of World. In 2013, Europe had caved on solar panel tariffs when China threatened wine exports, she said.

“Beijing knew exactly where to hit hardest — choosing products that would sting exporters in the largest, more influential member states like France, Spain, and the Netherlands — to sow disunity from within,” said Bouchaud.

Walking back Western tariffs seems unlikely despite farmer pleas, but countries have other ways to protect their farms. Finding new buyers or offering government support could help farmers survive without giving in on EV tariffs.

“This quid pro quo may restore some normalcy for battered agriculture sectors, but it’s hardly the sole path,” said Alicia García Herrero, chief economist for Asia-Pacific at French investment bank Natixis and a senior fellow at the Brussels-based think tank Bruegel. “Diversifying buyers, subsidies, or multilateral pacts could buffer shocks without escalating tensions, though negotiations remain the quickest route to stability.”

Blocking Chinese EV imports will likely delay the West’s own climate targets, Xu said. Chinese automakers are building more factories globally, blurring the line between foreign cars and domestic models. 

“At that stage, tariff protection will be harder to justify both legally and economically,” Xu said. “As global supply chains in EVs and batteries continue to integrate, prolonged protectionism will become increasingly costly and unsustainable.”