May 12, 2025
Tariff pause greeted with relief by stock markets; ag impact still murky
In a move that could bring welcome relief to specialty agriculture and horticulture businesses caught in the crossfire of international trade disputes, the Trump administration announced on Monday morning a 90-day reduction in tariffs on Chinese imports.
Reuters, CNN, NBC News and other news outlets reported U.S. tariffs on Chinese imports will be cut from 145% to 30%, while Chinese tariffs on U.S. imports will fall from 125% to 10%.
Officials from the two counties met in Geneva over the weekend.
The new 30% rate is the sum of the 20% duty imposed during the first weeks of President Donald Trump’s second term in response to alleged Chinese inaction on fentanyl flows, alongside the 10% across-the-board tariff Trump has imposed on all countries, according to an NBC News report.
In reaction to the news, the S&P 500 climbed 2.6% and the Dow Jones Industrial Average 2.5%. Tech-focused Nasdaq jumped 3.5%. Technology stocks, including smartphone makers, had dipped amid trade tensions.
The agreement said countermeasures imposed by China after April 2 would be removed. On March 4, China announced levies on $21 billion worth of American agricultural and food products.
China imported $29.25 billion worth of U.S. agricultural products in 2024, according to Reuters. That included about half of U.S. soybeans, the largest U.S. ag commodity shipped to China, or $12.8 billion.
The U.S. soybean market share in China dropped to 21% in 2024 from 40% in 2016, Reuters reported, as China increasingly relies on cheaper Brazilian product.
Overall, U.S. ag exports to China have declined since tariffs of up to 25% on soybeans, beef, pork, wheat, corn and sorghum in retaliation for duties on Chinese goods were imposed by Trump in his first term in 2018.
Also Monday, the U.S. and the U.K. announced a framework trade agreement. According to Politico, the U.S. plans to export $5 billion in products like machinery and ethanol, along with agricultural products, to Great Britain, with the 10% baseline tariff on British imports remaining.
In return, the U.K. can export to the U.S. 100,000 cars at a 10% tariff rate instead of the current 25% rate.
Shifting targets
Kam Quarles, National Potato Council CEO, told Organic Grower sister publication Spudman last month that the ongoing tariff fluctuations can be “challenging.”
“There’s a lot of concerned (parties) — not only growers, but also a number of different folks up and down the supply chain who are trying to make sense of all this,” he said. “We get a lot of calls on that every day. We’re trying to step back and provide a little bit of perspective on how all this may evolve positively for the industry. And clearly you have potential negative outcomes there, too.
“I’ve got to believe that the administration doesn’t want to see those negative outcomes happen. Clearly, just since their (initial tariffs) announcement, they’ve seen a lot about how markets will react and how industries will react to certain proposals, and I think they’re adjusting their focus based on that feedback.”
Goods compliant with the United States-Mexico-Canada Agreement, including fresh and processed potatoes, are not subject to tariffs, which Quarles said is a positive. China, India and the European Union are “unlikely to be export markets in the future,” he said, with the EU and India “a bit more of an open question.”
“Those countries clearly are threats, not only to the domestic market here in the U.S., but also to valuable export markets around the world in terms of their interest in shipping competing product there,” he said. “Our ability to access their markets are really compromised both by tariffs as well as non-tariff barriers.”
