Posted on March, 5, 2025 at 10:35 am
The United States on March 4 slapped tariffs on imports from its three largest trading partners, with US President Donald Trump announcing the imposition of 25% tariffs on products coming from Canada and Mexico and imposing an additional 10% tax on Chinese imports.
The Trump administration has said the tariffs are being imposed to hold Canada, Mexico and China accountable for their promises of “halting illegal immigration” and “stopping poisonous fentanyl and other drugs” from flowing into the country.
China wasted little time responding to the tariff increase, announcing that it was placing an additional tariff of 15% on US wheat, corn, cotton and chicken and an additional 10% on US soybeans, sorghum, pork, beef and other agricultural products, which translates to billions of dollars’ worth of US agricultural products.
Canada also responded swiftly to the news, with Canadian Prime Minister Justin Trudeau saying his country will counter with 25% tariffs on US imports. As of Tuesday morning, Mexico had not yet revealed how it would respond to Trump’s tariffs.
While many sectors in the four countries would be damaged by an escalating trade war, economists have said that US agriculture would rank at or near the top of those most severely affected.
Canada is by far the largest exporter of wheat to the United States, which last year imported 92,000 tonnes from its northern neighbor, up from 65,000 tonnes the previous year, according to the Foreign Agricultural Service (FAS) of the US Department of Agriculture.
Mexico accounts for nearly half of US corn exports, with an intake of 23.4 million tonnes in the 2023-24 marketing year worth an estimated $5 billion dollars, according to the FAS. US Census data also showed that Mexico was the leading importer of US wheat in 2023-24, purchasing $937 million worth of the food grain from its northern neighbor. Mexico was the second largest importer of US wheat in 2024 ($2 billion), Census data showed.
“All of this is difficult and problematic for US agriculture,” veteran economist and grain market analyst Dan Basse, who is president of AgResource Inc., told World Grain recently.
Even before this latest round of tariffs, China’s imports of US agricultural products had been declining. The world’s top agricultural importer and second-largest economy brought in $29.25 billion worth of US agriculture products in 2024, a 14% drop from a year earlier, extending the 20% decline seen in 2023. China has been building food and agriculture self-sufficiency as it attempts to reduce its dependence on imports.
Although China has reduced its dependence on soybean imports from the United States in recent years, it still purchased an estimated $11 billion worth in 2024, the most by any country, according to Census data. Chinese wheat imports from the United States in 2024 were valued at $570 million, which ranked third.
In 2018, during his first term as president, Trump initiated a trade war with China by imposing massive tariffs on Chinese goods. China responded in kind, which devastated US soybean and corn producers who since that time have lost a significant amount of the Chinese market to Brazil and other countries.
“China is well prepared,” Basse said. “China has had years to diversify suppliers, which they have done very nicely. I do think the Chinese are fearful that Trump means what he says and that the tariffs could ultimately get to 50% or 60%.”
Source: World Grain