U.S. agricultural exports, fuels, and manufactured goods are poised to face significant challenges as China prepares to implement its comprehensive retaliation against President Donald Trump’s newly imposed tariffs. Both sets of measures are set to take effect next week.
Following President Trump’s announcement of a 34% tariff on Chinese imports—raising the total tariff for this year to an imposing 54%—China has responded with plans to impose equivalent tariffs on U.S. goods, along with a series of other countermeasures. As Emily Benson, a consultant with Minerva Technology Policy Advisors, points out, “While the US is still obviously a very important market, fewer firms are now existentially dependent on US suppliers.”
Traditionally, China has targeted specific sectors in a “mirror response” to U.S. restrictions. However, this broader strategy signals what Benson describes as a “pretty significant warning shot” to the Trump administration, urging it to reconsider additional measures.
According to data from the Commerce Department, the United States exported nearly €132 billion in goods to China in 2024, a stark contrast to the €401 billion it imported. Key U.S. exports to China include electrical and electronic equipment, various fuels, oilseeds, and grains.
There is a notable shift in China’s approach this time compared to the previous administration. With Beijing working towards greater technological self-sufficiency, its willingness to retaliate against U.S. tariffs has noticeably increased. “US farmers will bear a heavy burden,” said Wendy Cutler, vice president of the Asia Society Policy Institute. She cautions that agricultural exports to China could “become too expensive to be competitive” due to the added tariffs.
Last year, the U.S. exported approximately €13.96 billion in electrical machinery to China. Soybeans, oilseeds, and specific grains constituted a substantial portion of U.S. exports, totaling €12.23 billion, as highlighted by Scott Gerlt, chief economist at the American Soybean Association. He noted, “China bought 52% of our (soybean) exports in 2024,” emphasizing the difficulty in finding alternative markets given China’s massive purchasing size.
The announcement regarding tariffs led to a swift decline in soybean prices. In addition, China imported around €13.4 billion worth of various fuels and oils from the United States in the past year. The tariffs could have serious implications for the oil and gas industries in states like Texas and Louisiana, which had seen significant export growth to China in 2023, according to a report from the U.S.-China Business Council.
Despite previous successes in exporting electrical machinery, the semiconductor sector has suffered due to expanded U.S. export controls on advanced technology. Beyond tariffs, China has also imposed restrictions on rare earth element exports and taken actions against U.S. firms in sectors like drones, defense, and aerospace.
Benson highlights a critical point: “China controls about 69% of rare earth element mining and about 90% of refining.” This dominant position may lead to pivotal chokepoints in industries reliant on these elements, including semiconductor manufacturing, magnets, optics, and lasers. “Some of these are targeted, of course, at chips,” she added, underscoring the interconnected nature of these industries.
As the conflict between Washington and Beijing escalates, Benson warns that the U.S. remains “relatively exposed to these Chinese controls” and will require a robust industrial policy response to bolster domestic production capabilities effectively.
Edited By Ali Musa
Axadle Times International–Monitoring.
