US corn, soybean exports in limbo as trade tensions escalate: Sosland

USA – A new wave of tariffs has cast uncertainty over more than US$21 billion worth of U.S. corn and soybean exports, as the White House imposed fresh duties on Mexico, Canada, and China on March 4, according to market insight from Sosland Publishing.

These nations, which are among the largest buyers of U.S. agricultural products, have already announced or hinted at retaliatory measures, heightening concerns over market access and trade disruptions.

According to data from the Foreign Agricultural Service of the U.S. Department of Agriculture, Mexico, Canada, and China accounted for over 46% of U.S. corn exports and more than 61% of U.S. soybean exports by value in 2024.

Mexico was the top export market for U.S. corn, with shipments valued at US$5.6 billion. Canada ranked fifth at US$449 million, while China was eighth at US$328 million. For soybeans, China was the top destination, purchasing US$12.8 billion worth, while Mexico followed in third place at US$2.3 billion.

Any retaliatory tariffs imposed by these countries would add to existing challenges for U.S. agricultural producers, who have already been losing market share to South American growers. Tariffs, which are paid by importers, make foreign-sourced products more expensive and potentially less attractive to buyers.

“With commodities, once you restrict a market, another can come in and backfill,” said Michael McAdoo, partner and director of global trade and investment at Boston Consulting Group.

“To that extent, agricultural and natural resource products are much more susceptible to diversion and substitution,” he added.

After delaying implementation for a month, the White House imposed 25% tariffs on most imports from Mexico and Canada on March 4.

Additionally, a tariff on goods from China, initially imposed in February, was increased to 20%. According to U.S. Census Bureau data, these three nations collectively represented 41% of total U.S. trade in 2024 (Mexico at 15.8%, Canada at 14.3%, and China at 10.9%).

China has already retaliated by imposing an additional 15% tariff on U.S. corn imports and a 10% tariff on soybean imports. According to China’s customs department, the country also suspended the soybean import privileges of three major U.S. grain companies: CHS Inc., Louis Dreyfus Company Grains Merchandising, and EGT.

Meanwhile, Canada has announced immediate 25% tariffs on more than US$20 billion worth of U.S. imports, with another US$86 billion in tariffs planned in the coming weeks. Mexico is expected to announce its own countermeasures on March 9.

McAdoo highlighted that agricultural commodities and civilian aircraft are likely to bear the brunt of this escalating trade dispute.

“Much of the market share abroad that U.S. agribusiness is losing to foreign competitors will be hard, if not impossible, to win back,” McAdoo said.

According to him, the longer the trade wars drag on and the uncertainty over U.S. trade policy persists, the more time rivals will have to build the production capacity, distribution infrastructure, and deep-rooted relationships with importers they will need to erode the competitive advantage that U.S. suppliers have built over decades.

Since 2017, China has been shifting its agricultural imports away from the United States in favor of other suppliers, particularly Brazil. In 2017, the U.S. was China’s top agricultural supplier, exporting roughly US$28 billion worth of goods, while Brazil trailed closely with US$25 billion.

However, by 2018, Brazil had overtaken the U.S. as China’s primary supplier, and its lead has only expanded. In 2024, Brazil shipped over US$50 billion in agricultural products to China, while U.S. exports to China totaled less than US$30 billion.

Corn and soybean futures have dropped sharply as traders factor in the impact of the new tariffs, coupled with expectations of increased U.S. corn planting and robust South American crop forecasts.

On March 4, CME Group’s May corn futures contract settled at just above US$4.51 per bushel, a 13% decline from a February 19 peak of US$5.18 per bushel. Similarly, the May soybean futures contract dropped from over US$10.92 per bushel in early February to US$9.99 per bushel, a nearly 9% decline.

“By making U.S. crops and foodstuffs more expensive than alternatives, high tariffs lower the cost to importers of diversification. Over time, importers could completely unwind complex relationships with U.S. suppliers,” McAdoo noted.

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