Trade Policy Shifts and Their Potential Implications for U.S. Agricultural Exports

Protectionist policies are once again threatening to reshape agricultural trade, as the U.S. administration escalated tariffs on Chinese electric vehicles (EV) in May 2024, echoing the actions of its predecessor. Presidential hopefuls have taken this a step further, advocating for increased tariffs on Chinese products and those from other countries. Meanwhile, U.S. lawmakers are also considering revoking China’s Permanent Normal Trade Relations (PNTR) status—a move that has already been applied to countries like Cuba and North Korea. This action would trigger even higher tariffs on Chinese imports, escalating tensions further. These policy shifts are reminiscent of past actions that led to significant retaliatory measures from China and other countries, severely impacting U.S. agricultural exports. The agricultural sector, particularly commodities such as soybeans, corn, beef, and wheat, bore the brunt of this trade retaliation. Considering these developments, we examine the potential economic effects of three U.S. trade policy scenarios on these critical commodities for the American Heartland.