Farmers in US decry new round of tariffs

Placing additional tariffs on China and other major US farm produce importers will have "severe consequences", a farmers' association said as an additional 10 percent tariff imposed by the administration of Donald Trump on Chinese imports into the US came into effect on Tuesday.

US agricultural exports were projected to reach $170.5 billion in the fiscal year 2024, with China, Mexico, and Canada accounting for about 49.9 percent of the total, according to the 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 took effect after midnight.

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

It said US 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 agriculture exports. They are indispensable markets for the livelihood of the American agricultural 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.

China has filed a complaint with the World Trade Organization's dispute settlement mechanism against the US decision, the Ministry of Commerce said on Tuesday.

The Customs Tariff Commission of the State Council also said on Tuesday that China will impose additional tariffs on certain US products starting from Feb 10. An extra 15 percent tariff will be imposed on imported coal and liquefied natural gas originating from the US.

Countermeasures taken

Crude oil, agricultural machinery, automobiles with large displacement, and pickup trucks will be subject to an additional tariff of 10 percent, said the statement.

During the 2018 trade tensions, in response to the hefty US tariffs imposed on Chinese goods worth billions of dollars, China, previously the largest importer of US soybeans, imposed an additional 25 percent retaliatory tariff on US exports. Since then, the global soybean markets have undergone a significant reshuffling.

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 USDA data.

The National Corn Growers Association and American Soybean Association, in a trade study released in October, said that US soybeans and corn, the country's top two export commodities, which 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 is "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 US 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 could raise the costs of imported agricultural products for US consumers, potentially leading to retaliatory tariffs that decrease the export demand for US agricultural products and farmer prices.

"Tariffs will make US-produced soybeans and corn less competitive than 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.