Trade tensions have once again ensnared US farmers. Although China's retaliatory tariffs have been relatively limited thus far, they could escalate. Moreover, broader trade tariffs mean that US soybean exports to other countries, besides China, are also at risk, ING Group said in a report. China targets US agricultural products In response to the US […]
Trade tensions have once again ensnared US farmers. Although China's retaliatory tariffs have been relatively limited thus far, they could escalate. Moreover, broader trade tariffs mean that US soybean exports to other countries, besides China, are also at risk, ING Group said in a report. China targets US agricultural products Copy link to section In response to the US increasing tariffs on Chinese imports from 10% to 20%, China has retaliated with additional tariffs, primarily targeting the US agricultural industry. These new tariffs will range between 10-15%. Starting on March 10, the US will face additional tariffs on a variety of goods. Soybeans, sorghum, pork, beef, aquatic products, fruits, vegetables, and dairy products will see a 10% tariff increase. Wheat, corn, cotton, and chicken will see a 15% tariff increase. The focus of this will be on the impact on soybeans, corn, and wheat. China currently imposes a 3% most favoured nation (MFN) tariff rate on soybean imports. The MFN tariff rate for corn and wheat imports is 1% for in-quota and 65% for out-of-quota. The existing tariffs on US agricultural imports, imposed during the 2018 trade war, remain in effect in China. Tariffs on soybeans Copy link to section As a result, US soybeans are subject to a 30.5% tariff. Corn and wheat imports face a 26% tariff within quota limits, and a 90% tariff for imports exceeding the quota. Warren Patterson, head of commodities strategy at ING Group said: In turn, we believe that China has been fairly restrained in its response; the government could have simply removed the tariff waivers that were provided in recent years, which would have seen imports from the US charged a significantly higher tariff than they are set to be charged from 10 March. "It's possible that China is holding back in case the US moves to raise tariffs further," he added. Source: ING Research CBOT prices initially dipped after China's announcement, but all markets have since…