As the United States prepares to impose an additional 10 percent tariff on Chinese imports starting on March 4, 2025, China is reportedly readying its own retaliation. According to Chinese state media, Beijing is likely to target U.S. agricultural exports, a move that could escalate the ongoing trade tensions between the two largest economies in the world.
The proposed 10 percent tariff would increase the overall duties on Chinese goods to 20 percent, building on the initial 10 percent tariff that was introduced in the previous month. The retaliation from China, as speculated by the Chinese press, is expected to include both tariffs and a range of non-tariff measures, potentially focusing on U.S. agricultural and food products.
Agriculture plays a significant role in U.S.-China trade relations, with China being the largest export market for American agricultural and food products. The U.S. agricultural sector has long been used by China as leverage during trade disputes. Over the years, U.S. agricultural exports to China have fluctuated significantly, particularly during periods of heightened trade tension.
In 2024, the U.S. exported agricultural goods worth approximately $29.25 billion to China, representing a 14 percent decline from the previous year. This decline is not a recent phenomenon; it traces back to 2018, when China imposed tariffs of up to 25 percent on key American agricultural products such as soybeans, beef, pork, wheat, corn, and sorghum. These tariffs were a direct response to U.S. duties on Chinese goods, which were imposed by the Trump administration as part of its broader trade war strategy.
Soybeans, in particular, have been a crucial commodity in the U.S.-China trade relationship. In 2024, the U.S. shipped approximately half of its soybean exports to China, totaling around $12.8 billion. However, China has increasingly turned to Brazil as a more cost-effective supplier of soybeans, reducing its reliance on U.S. exports. As a result, the U.S. market share for soybeans in China has sharply declined. In 2024, the U.S. accounted for just 21 percent of China’s soybean imports, down from 40 percent in 2016.
This shift in purchasing patterns has been driven by a combination of factors, including China’s search for more affordable alternatives and its own domestic agricultural policies. Brazil’s soybeans have become a more attractive option due to lower prices and increased production capacity, making it a viable competitor to U.S. exports.
In addition to soybeans, the U.S. has faced challenges in maintaining its position as China’s primary supplier of other agricultural products. The U.S. also lost its dominance as China’s main corn supplier after China approved imports of Brazilian corn in 2022. In 2024, China’s purchases of U.S. corn plummeted to just $561 million, a dramatic decrease from $2.6 billion in 2023. This decline in demand for U.S. corn is also attributed to both the increased availability of Brazilian corn and the growth of China’s own domestic production.
The situation highlights the shifting dynamics of global agricultural trade, where U.S. producers face growing competition from other countries, particularly in the Asian market. For American farmers, these developments pose significant challenges. The U.S. agricultural sector has already been hit hard by previous trade disputes, and further tariffs or restrictions on exports to China could deepen these economic pressures.
Moreover, the trade war between the U.S. and China has had broader implications for global agricultural markets. As the two countries navigate their trade differences, the ripple effects are felt across the world, influencing prices and trade flows in various commodities. The decline in U.S. agricultural exports to China has led to changes in supply chains, prompting U.S. farmers to seek new markets and alternative buyers for their products. In some cases, this has resulted in trade diversions, with U.S. products being redirected to other markets, but at lower prices or with greater competition.
For the Chinese government, imposing tariffs on U.S. agricultural products would serve as a symbolic and strategic response to the tariffs imposed by the U.S. on Chinese goods. It would also provide China with a degree of leverage in the ongoing trade negotiations. However, targeting agricultural exports could also have domestic consequences for China, as it could lead to higher food prices and disruptions in its own supply chains.
In the end, the U.S.-China trade war continues to evolve, with both sides seeking to outmaneuver each other through a series of tariff escalations and retaliatory measures. While China has already shown a willingness to target U.S. agricultural products in past conflicts, the stakes are higher than ever, as both nations stand on the brink of an all-out trade war that could have far-reaching economic and geopolitical consequences.
