China suspends import licenses of three us grain giants amid rising trade tensions
CHINA – China has suspended the import licenses of three major US agricultural exporters, CHS Inc., Louis Dreyfus Co. Grains Merchandising, and EGT, a company partially owned by Bunge Global SA, due to the detection of ergot and seed-coating agents in soybean shipments.
China’s customs department made the announcement on March 4, which coincided with the imposition of new US tariffs on Chinese imports.
The United States raised tariffs on various Chinese products by an additional 10%, bringing the total tariff rate to 20%. In response, China’s commerce ministry announced retaliatory tariffs on US agricultural and food products valued at approximately US$21 billion.
These tariffs, including a 10% tariff on US soybeans and sorghum and a 15% tariff on wheat and corn, will take effect on March 10. However, products already in transit will be exempt until April 12, according to Reuters.
The latest trade actions are exacerbating an already declining trend in US agricultural exports to China. In 2024, China imported US$29.25 billion worth of US agricultural products, marking a 14% decrease from 2023, which had already experienced a 20% decline from the previous year.
This reduction aligns with China’s broader strategy of bolstering food and agricultural self-sufficiency to reduce reliance on imports. Nevertheless, China remains the largest market for US soybeans, purchasing an estimated US$11 billion worth in 2024, accounting for nearly half of total US soybean exports.
Caleb Ragland, president of the American Soybean Association, expressed concerns over the potential economic impact on US farmers, recalling the severe consequences of the 2018 US-China trade war.
“Tariffs are not something to take lightly and ‘have fun’ with. Not only do they hit our family businesses squarely in the wallet, but they rock a core tenet on which our trading relationships are built reliability,” Ragland stated.
Soybean producers, in particular, are bracing for significant disruptions. “As the No. 1 export crop for the US, soybean producers face huge, disproportionate impacts from trade flow disruptions, particularly to China, which is our largest market,” Ragland added.
He also noted that Brazil and other soybean-producing countries are poised to capitalize on any supply gaps left by US exports. The 2018 trade war resulted in an estimated US$27 billion loss for US agriculture, with soybeans accounting for 71% of the losses.
US farmers have yet to fully recover from those setbacks, and further trade hostilities could deepen their economic difficulties.
The tensions extend beyond China. On the same day, US President Donald Trump imposed a 25% tariff on agricultural imports from Canada and Mexico, prompting Canada to issue reciprocal 25% tariffs on US products.
Mexico has yet to announce countermeasures, but the escalating trade dispute threatens US agricultural trade with its three largest trading partners, China, Canada, and Mexico.
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