Ag bracing for potential Chinese tariff retaliation

Ag bracing for potential Chinese tariff retaliation
May 15, 2024

President Biden increased tariffs on $18 billion of Chinese products

By Diego Flammini
Staff Writer

The U.S. ag community is watching to see if it will be caught in the crosshairs of Chinese retaliation following a tariff announcement.

“Retaliation against agriculture would be unfortunate, given the impact it may have on our sector, as well as global food security,” as USDA spokesperson told in an emailed statement.

“An impact (of the tariffs) could be from some form of retaliation from China, whether by retaliatory tariffs, or by a slowdown in purchases of U.S. ag products,” Mike Tomko, director of communications with the American Farm Bureau Federation, told in an email.

On May 14, President Biden announced increased tariffs on $18 billion of Chinese goods.

The tariff rate on some steel and aluminum, for example, will increase from 0-7.5 percent to 25 percent. And the tariffs on electric vehicles will rise from 25 percent to 100 percent.

In response, China promised to “take all necessary actions to protect its legitimate rights,” a spokesperson for the country’s foreign ministry said, CNN reports.

Some analysts believe China has been taking action against the U.S. already.

Soybean purchases could indicate this, said Moe Agostino, chief commodity strategist with Risk Management.

“I think they have already done so as (China) has bought 0 bushels of 2024/2025 U.S. soybeans,” he said. “It’s been a long time since that has happened.”

Even prior to President Biden’s announcement, farmers warned of potential backlash from China and reminded lawmakers of the trade war in 2018.

“There is substantial risk that more unanticipated tariff action will undermine investments, export prices, and farm income,” Josh Gackle, a North Dakota soybean farmer, told the House ag committee on March 20.

China has a history of targeting trade.

With Canada, China took action against Canadian canola and meat in 2019 following the RCMP’s arrest of Huawei executive Meng Wanzhou at the request of U.S. authorities.

China resumed imports of Canadian pork and beef in November 2019, and lifted its ban on Canadian canola in May 2022.

During China’s ban, exports of Canadian canola dropped from $2.8 billion in 2018 to $1.8 billion in 2021.

In March 2021, China banned imports of Taiwanese pineapples citing pest issues, though Taiwanese officials claimed no pest problems.

And back in 2010, China suspended trade with Norway and restricted salmon imports after Liu Xiaobo, a Chinese political prisoner, won the Nobel Peace Prize. The two countries repaired their relationship in 2016.

The USDA implemented a program in November 2023 to expand market opportunities.

The $1.2 billion Regional Agriculture Marketing Program helps producers and exporters diversify their markets and strengthen U.S. agriculture’s presence in existing markets.

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