Threatened tariffs from China could take a huge toll on U.S. agriculture by cutting soybean exports by as much as 40 percent. The impact would be severely felt in MFA territory, where Missouri, Iowa and Kansas are among the top 10 soybean-exporting states.
On April 2, the Trump administration announced a second round of tariff increases on goods imported from China, a move meant to address the country’s illegal trade practices. The next day, China proposed tariffs against some of the most important U.S. exports, including soybeans, cotton, corn, wheat, sorghum and beef. Pork exported from the U.S. to China was already covered by recently announced Chinese tariffs.
“It is hard to remember a more potentially calamitous week for U.S. agriculture,” Missouri Farm Bureau President Blake Hurst said after the announcement. “If fully implemented, these actions spell trouble for Missouri agriculture producers.”
On April 12, Hurst and the presidents of the Missouri’s Cattlemen’s, Soybean, Pork and Corn Growers associations issued a joint statement urging elected leaders to “negotiate a solution that addresses the issue of intellectual property theft while protecting Missouri’s No. 1 industry from devastating retaliation.”
China is by far the leading destination for U.S. soybeans, accounting for nearly two-thirds of all U.S. soybean exports. A recent Purdue University study estimates that tariffs similar to those proposed by China would cause up to $3.3 billion in annual economic losses for soybeans alone. That figure doesn’t include lost sales of pork, corn, cotton and beef.
“There are no winners in a trade war, only casualties,” said Wesley Spurlock, chairman of the National Corn Growers Association. “As trade tensions continue to mount with China, the expanded list of tariffs on food and agriculture exports are making America’s farmers the first casualties.”
For beef producers, the tariffs could unravel the industry’s recent progress in growing sales to China. Following a 13-year absence, the U.S. regained access to the Chinese market last June. U.S. beef already faces a 12 percent tariff in China. The new measures would raise the tariff to 37 percent, putting the U.S. even further behind competitors with a free-trade agreement.
Trump’s proposed tariffs will take effect in June. A public comment period will last until May 11, and a hearing is set for May 15. China is not expected to take formal action unless the U.S. moves forward with implementing its tariffs.