US farmers group decries new round of tariffs

Department of Research, Strategic Studies and International Relations 04-02-2025

Placing additional tariffs on China and other major US farm produce importers will have “severe consequences”, a farmers association said as the Trump administration is set to impose 10 percent extra duties on Chinese imports on Tuesday.

US agricultural exports were projected to reach $170.5 billion in fiscal year 2024, with China, Mexico, and Canada leading the way, accounting for about 49.9 percent of the total, according to US Department of Agriculture data.

On Tuesday, US President Trump said he would pause 25 percent tariffs on Mexico and Canada for a month, but levies against China seemed set to take effect just after midnight.

In a statement, the Farmers for Free Trade, a leading agricultural trade advocacy organization, called on the US administration to reconsider the proposed tariffs.

It noted that American farmers are already struggling under record-high input costs, declining crop prices, and global supply gluts, and adding tariffs to the mix will only exacerbate the situation across much of rural America.

“As we are already seeing farmers will bear the heaviest burdens from retaliation and will now be an immediate target for steep reciprocal tariffs, tariffs will also put American farmers at a disadvantage to competitors in South America and other parts of the world who view tariff escalations as an open door to taking our market share,” it said.

“Canada, Mexico and China together buy half of all American ag exports. They are indispensable markets for the livelihood of the American ag economy. Placing tariffs on the three largest export markets for American farmers and ranchers, particularly for an extended period of time, will have severe consequences,” the statement said.

On Sunday, in response to what it called “the erroneous action by the United States”, China’s Ministry of Commerce said Beijing will file a complaint with the World Trade Organization and take corresponding countermeasures to firmly safeguard its rights and interests.

The countermeasures, though not specified, usually include retaliatory tariffs.

For example, in response to the hefty US tariffs imposed on billions of Chinese goods during the 2018 trade tensions, China, previously the largest importer of US soybeans, imposed an additional 25 percent retaliatory tariff on the American exports.

The move has since caused a significant reshuffling in global soybean markets.

In 2024, China is forecast to remain the largest market for US agricultural exports at $28.7 billion, an $800-million reduction from the previous forecast, largely due to strong South American competition on soybeans and corn, according to data from the USDA.

The National Corn Growers Association and American Soybean Association, in a trade study released in October, said that US soybeans and corn, the top two of the country’s export commodities that together account for about one-fourth of total US agricultural export value, are also “prime targets” for tariffs.

“As such, a repeated tariff-based approach to addressing trade with China places a target on both US soybeans and corn. Farmers and rural economies pay the price as a result,” the associations said in a release.

Trump on Sunday defended his decision to impose sweeping tariffs on the US’ top three trading partners, saying potential pain caused by tariffs are “worth the price that must be paid”.

Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington, said the tariffs will do great harm to American households and firms and will not have a beneficial effect on the US economy or even the US manufacturing sector.

“So, ‘the price that must be paid’ is pure punishment for the US, with no gain in sight,” Hufbauer told China Daily.

In “US Agricultural Trade Background Given Potential Tariffs,” an analysis published on the Farmdoc Daily website on Jan 21, researchers at the University of Illinois at Urbana-Champaign also noted that tariffs can raise the costs of imported agricultural products for US consumers, potentially leading to retaliatory tariffs that decrease export demand for US agricultural products and farmer prices.

“Tariffs will make US-produced soybeans and corn less competitive with those from other countries,” they wrote, adding that China’s share of US soybean exports has recovered to around 50 percent, but has not returned to the 60 percent share that existed before 2018.

US agricultural exports to China have experienced significant fluctuations between 2017 and 2024, influenced by trade tensions and policy changes.

In 2017, US agricultural exports to China were valued at $19.4 billion. However, during the trade conflict in 2018 in Trump’s first term, exports declined to $9.1 billion, and only rebounded to $26.4 billion in 2020, according to official US data.

source China Daily