China Increases Tariffs to 125%: What Ag Exports Will Be Most Impacted

China announced Friday it’s hitting back with more tariffs on U.S. goods. The new tariff rate is 125%, up from the 84% announced earlier this week.

This is in response to President Donald Trump’s announcement on Wednesday that the U.S. would be pausing reciprocal tariffs on most countries for 90 days, but upping the ante on China with a tariff of 125%.

The U.S. and China have been trading blows with tariff hikes for a while now. Just last week, President Trump headlined what he called “Liberation Day” by announcing tariffs on more than 180 countries. That included a 34% tariff on all Chinese goods. In response, China imposed 34% tariffs on U.S. goods two days later. With tariffs already in place, that brought the total rate to 60%.

More recently, the U.S. said on Tuesday that 104% duties on imports from China would take effect shortly after midnight. China fired back with an additional 50% tariff on U.S. goods.

Now China has raised the rate on U.S. imports to 125% starting Saturday. It’s a tit-for-tat with tariffs impacting some exports more than others.

The new tariff rate is likely 155.73%, up from the 114.73% we reported earlier this week. The American Soybean Association is still trying to confirm this new rate.

“Whether the tariffs are 50% or 100%, it really doesn’t matter. Either one shuts down trade until it doesn’t anymore,” says Arlan Suderman, chief commodities economist for StoneX Group. “It does hurt some of our energy exports to them. It hurts our cotton exports, our beef and our pork.”

U.S. Meat Exports Face Hefty Tariffs to China

Farm Journal reached out to U.S. Meat Export Federation (USMEF) Friday morning to nail down what the new tariff rate is on U.S. meat exports to China. While USMEF is still reviewing the details of China’s action, as of Friday morning, USMEF says its new calculations are assuming the higher tariff is applied to the same range of goods that has been covered by other tariff hikes:

(Lori Hayes )

“The additional tariff will push China’s effective duty rate on U.S. pork and pork variety meat to 172% and beef and beef variety meat will be tariffed at 147%,” USMEF vice president of communications Joe Schuele told Farm Journal.

Schuele says these rates represent the sum total of China’s 12% most-favored-nation tariff, retaliatory duties previously imposed by China, the new 34% duty that took effect April 10, the additional 50% duty that was announced a couple of days ago and the increase announced Friday morning.

China is Still Buying Soybeans

According to Suderman, the weekly export sales report from USDA showed China is still buying soybeans. Suderman says China was again the featured buyer of U.S. soybeans in the week ending on April 3, and he says that buyer was likely Sinograin.

The company bought 5.2 million bushels, although 4.9 million of that was a previous purchase by “unknown destinations.” Suderman says the purchase is likely for reserve beans, which are unaffected by the tariffs.

“Most of the recently announced purchases have been changes from unknown destinations. So, in other words, they just didn’t declare who they were initially or where it was going,” Suderman says. “Sinograin is a state grain agency. In other words, if they pay the tariff, it’s the right-hand paying the left-hand. Tariffs don’t really matter. They buy for the reserves. So in theory, they could buy a lot of soybeans and then auction them out of the reserves. We also saw during Trump 1.0 when they truly needed soybeans that they waived the tariffs.”

Sinograin Group was established in 2000 upon the approval of the central government. The company is responsible for the management and operation of central reserve stocks of grain, oil and cotton.

However, Suderman says China was buying Brazil’s soybeans over those from the U.S. already. They were cheaper even before the tariffs took place.

“When it comes to soybeans, I checked this morning and soybeans delivered to the port in China were $0.47 cheaper if they came from Brazil than if they came from the US. Gulf,” Suderman says. “That’s the bottom line. That’s before any retaliatory tariffs. That’s going to remain the case for a while. Based on the size of South America’s production, probably until we get to the fourth quarter. And then how many beans will they need from us?”

Suderman says he’s been telling clients for two years to be cautious about China, as the country looks to build up its reserves. He points out China is importing more than they’re crushing, which is another sign China is building up reserves. It is a bucket of grain they can tap into while the trade war plays out.