From 2010 through 2016, China was the top destination for U.S. agricultural exports based on value. In 2017, Canada became the top destination for U.S. agricultural products, and China and Mexico tied for second. However, starting in early 2018 the United States undertook several trade actions against China (and other countries) that precipitated retaliatory trade actions between the two countries.
The result of this trade war was a decline in trade between the United States and China. In 2018, U.S. agricultural exports to China declined 53% in value to $9 billion from $19 billion in calendar year 2017. By mid-2019, China’s market had shrunk to become the fourth largest destination for U.S. agricultural exports behind Canada, Mexico, and Japan.
The U.S.-China trade dispute started in March 2018, when President Trump announced tariffs of 25% on steel and 10% on aluminum imports (with some flexibility on the application of tariffs by country) using presidential powers granted under Section 232 of the Trade Expansion Act of 1962.
In July 2018, citing concerns over China’s policies on intellectual property, technology, and innovation, the Trump Administration imposed tariffs of 25% on $34 billion of selected imports from China using authority delegated by Section 301 of the Trade Act of 1974. Since then, the United States has expanded the coverage of Section 301 tariffs to $550 billion of imports from China.
China has retaliated with tariffs on a wide range of U.S. imports, including agricultural products. In April 2018, China levied retaliatory tariffs of 15% or 25% on imports from the United States, including 94 different U.S. food and agricultural tariff lines. These tariff lines mostly included pork, fruit, and tree nuts. In July 2018, China expanded the 25% retaliatory tariffs to 697 tariff lines in total. By September 1, 2019, the number of U.S. agricultural tariff lines with Chinese retaliatory tariffs increased to 1,053. China has proposed expanding and increasing tariffs on December 15, 2019, which would bring the total to 1,084.
During 2018 and 2019, the United States and China have taken a number of actions to escalate the trade dispute. This report provides a timeline of U.S. action and Chinese retaliation on U.S. agricultural products. It also provides a broad overview of Chinese retaliatory tariffs on U.S. agricultural products as of September 2019 and the proposed additional Chinese tariffs that may be in effect by December 2019. It concludes with key issues for Congress to consider.
To read full report, click hereCRS China Retaliatory Tariffs