China’s Finance Ministry has hit American goods with 10-15% tariffs, effective March 10, 2025 as a new trade war takes shape. 

Cotton and chicken imports from the United States will face 15% duty while soybeans will court 10%.

This comes as a response to President Trump’s recent doubling of tariffs on goods from China to 20%, effective March 4, 2025. Trump cited fentanyl for the additional 10%, which Beijing called “blackmail.” 

In the first fully public story by the state-run Global Times newspaper, China termed the fentanyl issue as untrue.

Fentanyl is a powerful opioid compound for relieving pain that apparently claims 1500 American lives weekly from overdoses.

Although China has been lukewarm since absorbing an initial 10% tariff on February 4, this time round it has acted.

The world’s second largest economy has also referred the now-doubled duty issue to the World Trade Organization (WTO)’s arbitration.

What now remains is tracking the possible impact on American goods, mostly agricultural produce like soy, grain and meat.

4 Countries

Any counter-measures will affect all four countries in the March 4 tariff timeline, the others being Canada and Mexico.

In the Sino-America context, China is the biggest destination for American agricultural goods, worth $29.25 billion in 2024. 

The above figure is a 14% decline from the 2023 imports and follows a 2022 decrement by 20%.

Upon the newest tariff blows, the vice chairman of Beijing-based China Society for World Trade Studies Huo Jianguo indirectly cited shrinking trade. He told Global Times that Trump is trying to reduce U.S.’ debt following such declines by taxing its key trade allies.

Affiliated to this is the huge trade deficit between China and the United States of $353.3 billion in favor of China (2023).

This is also true of Canada, whose exports outstrip American imports by $78.4 billion, as of 2023.

Like China, Canada has reciprocated with 25% counter-tariffs on U.S.’ goods as the March 4 fallout comes true.

It is therefore apparent that the 2.0 edition of the tariff war could affect bilateral agriculture, including U.S.’ prices. Below is a statistical picture of how trade war 1.0 affected world agriculture.

Agricultural Trade War Statistics 

Trade wars normally have a negative outcome on bilateral trade but benefit the wider global trade. At the bilateral level, billions are lost. One example is the $450 billion in overtaxed goods from both China and the United States in 2018 and 2019. 

At the international level, global trade shares the spoils of a bilateral fallout. In the 2018-20 period for instance, international trade actually hiked by 3% as other nations exploited opening up opportunities. However, American trade allies such as South Africa and the Philippines lost out, according to the National Bureau of Economic Research (NBER). In one study, 19 outsider nations saw export improvements in the 2018-20 trade war while 1 recorded negative outcome. 

Sometimes, a third party emerges as a reaper of massive fortune. Below is an example of such a beneficiary during the first China-U.S. trade war in 2018.

Brazil’s soybeans: in 2018, China counter-imposed 25% tariff on soybeans from the United States. The country then substituted U.S.’ soy imports for Brazil’s, which made farmers experience an unprecedented export boom. Between 2018 and 2023, Brazil annually exported 73% of its soybeans to China, even after tariffs reduced in 2020. U.S.’ 2018-20 soy exports to China would fall by 38% while Brazil’s would rise to constitute 78% of China’s soybean imports.

Do producers of developed countries get hurt in trade war? 

Governments of developed nations always protect their producers by $315 billion in subsidies, according to UNCTAD. This aid gets even more direct during trade war. The United States, for instance, gave cash to federal soy farmers worth $8.5 billion for losing prices and trade opportunities. Interestingly, this may have been $5.4 billion more than the actual damage that the tariff brought the soy sector.