US wheat exports vulnerable to tariff retaliation
As US President Donald Trump singled out China over tariffs and trade imbalances on April 7, individualized “retaliatory” tariff rates proposed for other nations beginning days later could do much more to upend US wheat exports.
On April 2, the White House announced sweeping new tariffs on more than 50 countries, including a combined 54% levy added for Chinese goods since Trump took office for his second term. That combined levy will take effect April 9, White House officials said.
On April 4, China responded with a tariff escalation of its own, slapping an additional 34% levy on US goods, on top of 10% to 15% tariffs China added on select products earlier this year, from wheat (15%) to soybeans (10%). That means US wheat exports to China will be tariffed at a combined rate of 49% beginning April 10, according to Chinese officials.
On April 7, Trump turned up the temperature on China by threatening via his Truth Social media platform an additional 50% tariff on top of already promised rates, unless Chinese officials back down from their own tariff increases on US exports, which Beijing has signaled it is unwilling to do.
Last year, China was the No. 4 destination for US wheat exports by value, according to the Foreign Agricultural Service (FAS) of the US Department of Agriculture (USDA), taking about $482.3 million worth of US farmers’ wheat. Those wheat exports now would face more than $236 million in additional levies from Beijing under the higher rates beginning later this week.
However, China’s share only accounted for 8.2% of total US wheat exports in 2024. The top export market for US wheat was Mexico, taking $1.05 billion, nearly 18% of all wheat exports. Those sales currently remain exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA), which Trump negotiated during his first term.
Total US wheat exports in 2024 were worth $5.87 billion, according to FAS data. Here’s a look at the top 10 US wheat export destinations by value, alongside new tariff rates the White House is imposing April 9:
1. Mexico
- Share of US wheat exports: $1.05 billion (17.9% of total)
- April 9 tariff rate: Exempt under USMCA
2. Philippines
- Exports: $735.7 million (12.8%)
- Tariff rate: 17%
3. Japan
- Exports: $582.8 million (9.9%)
- Tariff rate: 24%
4. China
- Exports: $482.3 million (8.2%)
- Tariff rate: 54%; retaliated with 49% levy on US wheat
5. South Korea
- Exports: $480.2 million (8.2%)
- Tariff rate: 25%
6. Taiwan
- Exports: $325 million (5.5%)
- Tariff rate: 32%
7. European Union
- Exports: $209.4 million (3.7%)
- Tariff rate: 20%
8. Thailand
- Exports: $197.9 million (3.4%)
- Tariff rate: 36%
9. Indonesia
- Exports: $148.5 million (2.5%)
- Tariff rate: 32%
10. Nigeria
- Exports: $148 million (2.5%)
- Tariff rate: 10%
Together, the top 10 nations took $4.36 billion worth, more than 74%, of US wheat exports last year. Minus Mexico, nearly 56% of those wheat exports ($3.31 billion) now face possible retaliation, with China already having responded. That leaves an additional $2.83 billion worth of US wheat vulnerable to trade decision making from longtime US allies, including Japan, South Korea, Taiwan and the European Union.
If the eight other top 10 nations were to respond with tariffs matching the White House’s, US wheat exports would face an additional $664.5 million in levies.
“Wheat farmers in the United States rely on fair trade with our neighbors and international partners to support their families and rural communities,” said Chandler Goule, chief executive officer of the National Wheat Growers Association (NAWG). “We hope continued discussions with our trading partners can resolve existing trade barriers and avoid long-term disruptions.
“Farmers face many challenges, and as the farm economy continues to be squeezed by the high cost of production and low commodity prices, we are concerned about how new tariffs on key farm inputs will hurt farmers’ bottom line.”
In addition to tariff impacts, a series of new levies and restrictions proposed by the US Office of the US Trade Representative (USTR) on importers and exporters that use Chinese-made ships could have disastrous impacts on US wheat trade, according to a recent economic impact report commissioned by dozens of industry groups.
The proposed penalties, intended to boost US shipbuilding, include fines of up to $1.5 million for each Chinese-made ship that enters a US port and could increase costs of most shipments from $15 to $40 per tonne, or 50¢ to $1.25 per bushel, on vessels carrying agricultural exports, according to industry estimates.
If that happens, US wheat exports could decline by more than 62%, and more than 33% of wheat sector jobs could be slashed, the report projected.
On March 24, NAWG and US Wheat Associates submitted a letter to the USTR opposing the port fees, noting that international customers already had grown hesitant to maintain purchases since the new regulations had been proposed.
“The US wheat industry and its customers are heavily dependent on ocean-going vessels, especially dry bulk carriers, and exports are vital to this sector,” the associations wrote. “About half of the US wheat crop is exported each year, including around 90% of wheat grown in Washington, Oregon, Idaho and Montana.
“One of the most concerning proposals is the imposition of port entrance fees, which would significantly increase export costs for US wheat. For example, a proposed $1 million port fee for a vessel carrying 40,000 metric tons of wheat would equate to an 8% to 12% export tax at current prices. US exporters and their customers would directly bear port fee impacts.”
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Tags: Mexico, tariffs, China, exports, US, wheat, purchases
