Tariffs pressure US corn, soybean exports worth $21 billion

The fate of more than $21 billion worth of US corn and soybeans got murkier March 4, as the White House implemented new tariffs against Mexico, Canada and China, and those countries signaled they would respond in kind.

The United States’ top three trade partners last year accounted for more than 46% of US corn exports and more than 61% of US soybean exports by value, according to data from the Foreign Agricultural Service of the US Department of Agriculture. Mexico was the top 2024 export market for US corn, with an estimated value of $5.6 billion. Canada was fifth ($449 million) and China was eighth ($328 million). For US soybeans last year, China was the top market ($12.8 billion), with Mexico third ($2.3 billion).

Any retaliatory tariffs enacted by those countries will be another hurdle for US producers to overcome, after losing market share to South American growers in recent years. Tariffs are paid by importers, making products sourced from abroad more expensive and potentially less appealing to purchase.

“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.”

After delaying their implementation for a month, the White House on March 4 enacted 25% tariffs on most goods imported from Mexico and Canada, and escalated to 20% a tariff on goods imported from China that began in February. Those countries accounted for 41% of total US trade in 2024, according to US Census Bureau data (Mexico 15.8%, Canada 14.3%, China 10.9%).

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China already has responded by placing an additional 15% tariff on US corn imports and an extra 10% tariff on US soybean imports, while also suspending the soybean import privileges of three US companies: CHS Inc., Louis Dreyfus Company Grains Merchandising and EGT, according to China’s customs department.

Canada said it would impose 25% tariffs on more than $20 billion worth of US imports immediately and another $86 billion worth of goods in three weeks, with a specific list of products yet to be disclosed.

Mexico said it would announce its own retaliatory levies March 9.

McAdoo cited agricultural commodities and civilian aircraft as the two US industries that would be hit hardest and most immediately by a tariff exchange.

“Much of the market share abroad that US agribusiness is losing to foreign competitors will be hard, if not impossible, to win back,” he said in an analysis of the Trump administration’s first trade war in 2018. “The longer the trade wars drag on and the uncertainty over US 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 US suppliers have built over decades.”

Since 2017, China has shifted its agricultural imports away from the United States toward other suppliers. In 2017, the United States (about $28 billion) edged out Brazil (about $25 billion) in exporting agricultural goods to China, according to Trade Data Monitor. In 2018, Brazil overtook the United States as China’s top agricultural partner by value, and its lead has grown increasingly in recent years. Last year, Brazil shipped more than $50 billion worth of agricultural products to China, while the United States sent China less than $30 billion.

May soybean futures 2025_©SOSLAND PUBLISHING CO._e.jpgCredit: ©SOSLAND PUBLISHING CO.
Corn and soybean futures values have fallen sharply in recent weeks as markets have processed their tariff fears, alongside 2025 US planting estimates (more corn, fewer soybean acres) and strong South American crop prospects.

The CME Group May corn futures contract has fallen from a Feb. 19 high above $5.18 per bushel and settled just above $4.51 per bushel March 4, paring nearly 13%. The CME Group May soybean futures contract has fared similarly, tumbling from a high over $10.92 per bushel in early February to settle at $9.99 per bushel March 4, losing nearly 9%.

“By making US crops and foodstuffs more expensive than alternatives, high tariffs lower the cost to importers of diversification,” McAdoo said. “And the less faith importers have in the (United States) as a stable supplier, in view of the potential for future trade conflicts, the more necessary it becomes for them to hedge and further diversify. Over time, importers could completely unwind complex relationships with US suppliers.”

Tags: soybean, USA, restrictions, Mexico, China, corn