AgShared

Can China survive higher prices on much needed American farm imports?

China has responded to former President Donald Trump’s tariffs by adding a 15% tax on key American farm products like chicken, pork, soybeans, and beef.

The new tariffs, announced last week, came after Trump decided to double the levy on Chinese imports to 20% on March 4. However, China’s Commerce Ministry clarified that goods already in transit would be exempt from these additional tariffs until April 12.

This isn’t the first time American farmers have felt the impact of trade tensions. During Trump’s first term, China also placed tariffs on U.S. farm products, leading to a sharp drop in sales. The situation improved in January 2020 when the two countries reached a trade truce, with China agreeing to increase purchases from U.S. farmers. As a result, American farm exports to China hit a high of $38 billion in 2022. However, that number declined to $29 billion in 2023 and $25 billion last year. According to the U.S. Department of Agriculture, sales in January were down 56% compared to the previous year.

The U.S. agricultural trade deficit is expected to grow in 2025, according to the latest USDA Outlook for U.S. Agriculture Trade report. The agency is now projecting that agricultural imports will exceed exports by $49 billion. This shift comes as exports see modest growth, while imports continue to rise at a faster pace.

For fiscal year 2025, U.S. agricultural exports are now forecast at $170.5 billion—up $500 million from November’s estimate. This increase is largely driven by stronger grain and feed exports, particularly corn, which saw a $1.4 billion boost thanks to rising demand and higher prices. However, gains were somewhat offset by a weaker outlook for oilseeds.

Mexico is set to remain the top destination for U.S. agricultural products, with exports expected to hit a record $30.2 billion—$300 million higher than earlier projections.

On the import side, agricultural purchases are forecast to rise to $219.5 billion, an increase of $4 billion from previous estimates. With import demand outpacing export growth, the trade deficit is expected to continue expanding.

U.S. Secretary of Agriculture Brooke Rollins announced that the USDA will release the first portion of funding previously paused for review under the Inflation Reduction Act.

Following White House directives, Rollins confirmed in a Feb. 20 news release that the USDA will honor existing contracts, allocating approximately $20 million through the Environmental Quality Incentive Program, the Conservation Stewardship Program, and the Agricultural Conservation Easement Program.

National Farmers Union President Rob Larew welcomed the decision, calling it a “first step” in ensuring USDA follows through on commitments to farmers. He urged the department to complete its review quickly, release remaining funds, and maintain continuity in key programs.

Rollins underscored the challenges facing American farmers and criticized the Biden administration for policies she described as overregulation, extreme environmental measures, and inflation. She also accused the administration of mismanaging IRA funds, stating that some allocations had nothing to do with agriculture.

While reaffirming support for farmers and ranchers, Rollins said the USDA’s review is ongoing, with additional funding announcements expected soon.