In 2018, the United States imposed Section 232 tariffs on steel and aluminum imports from major trading partners and separately from Section 301 tariffs on a large range of imports from China. In response, Canada, China, the European Union, India, Mexico and Turkey imposed retaliatory tariffs on many US exports, including a wide range of agricultural and food products. Individual product lines saw price increases ranging from 2% to 140%. The retaliatory tariffs raised the price of US agricultural exports in these markets relative to alternatives that were either produced locally or imported from other international sources. Despite opportunities for US producers to sell their products to non-retaliating trading partners, the overall effect has been a reduction in US agricultural exports. Because agricultural production of certain commodities is concentrated in certain states, retaliatory tariffs have affected states differently. As of October 2021, many retaliatory tariffs were still in place with the following exceptions: Canada and Mexico tariffs were removed in May 2019, China announced tariff exemptions for certain products after the signing of the economic agreement and Phase 1 trade between the United States and China on January 21, 2019. On October 15, 2020, and in October 2021, the United States and the EU reached agreements to address global excess steel capacity and aluminium, which include the replacement of Section 232 tariffs with a tariff quota and the lifting of EU retaliatory tariffs.


The retaliatory tariffs resulted in a significant reduction in U.S. agricultural exports to retaliatory partners. Nationally, direct U.S. agricultural export losses from retaliatory duties totaled more than $27 billion from 2018 to the end of 2019. Among retaliatory partners, China accounted for about 95% of losses ($25.7 billion), followed by the EU ($0.6 billion), and Mexico ($0.5 billion), with Canada, Turkey and India having smaller shares. We estimated that annualized losses for selected commodities due to retaliatory tariffs were $13.2 billion between mid-2018 and the end of 2019.


At the commodity level, export losses were substantial but highly concentrated. Soybeans accounted for the greatest level of losses, accounting for nearly 71% ($9.4 billion in annualized losses) of the estimated trade damage share. By comparison, trade losses for sorghum ($854 million annualized losses) and hogs ($646 million annualized losses) were the second highest, accounting for over 6% and just under 5% of the total, respectively. .

Overall, specialty crops accounted for about 6% of losses ($837 million in annualized losses) for fruits, vegetables and nuts.

At the state level, losses were largely concentrated in the Midwest with Iowa ($1.46 billion in annualized losses), Illinois ($1.41 billion in annualized losses) and Kansas ($955 million). dollars of annualized losses), representing approximately 11, 11 and 7 percent, respectively, of total losses. State-level losses were uneven and not directly proportional to the size of state-level exports. States that produced more of the commodities most severely targeted by retaliation – soybeans, sorghum, pork and cotton – suffered higher losses.

The US market share of China’s total agricultural imports, which had fallen from 20% in 2017 to 12% in 2018, remained significantly depressed in 2019, at 10%. This study examined changes in U.S. agricultural exports to China surrounding the signing of the Phase One Agreement in January 2020 and China’s subsequent announcements of tariff exemptions beginning in March 2020. U.S. exports of products benefiting of announced tariff exemptions increased by 118% compared to 2019. many of these products may also have benefited from tariff exemptions upon request. U.S. Agricultural Exports to China Rebounded and Reached Record Highs in 2020; however, some of this increase was likely due to factors unrelated to trade policy, including the recovery of the pig herd in China following African swine fever and the consequent increase in feed demand. resulted. However, US market share has not fully recovered to pre-retaliatory levels a year after the phase one agreement was signed.


The USDA Economic Research Service was commissioned to assess the impact of foreign tariffs on US agricultural products by the House Committee on Appropriations (PL 116-260). This report provides state-level effects of retaliatory tariffs to ultimately address this charge in response to the committee’s request. To do so, we first reviewed previous research on prospective and retrospective estimation of US farm losses caused by retaliatory tariffs. We have summarized the main results by estimation method, product and state regarding retaliatory tariffs.

Trade and tariff data was also compiled to provide a descriptive analysis of US agricultural exports during the retaliatory tariff period.

Second, we relied on product mix estimates for the 2018-2019 retaliatory tariff effect from Grant et al. (2021) to study the distribution of export losses by state and commodity groups using the ERS State Exports, Cash Receipts Estimates. As such, our analysis provides detailed insight into the effect of foreign retaliatory tariffs on farmers at the state level. After the implementation of the phase one agreement, the latest detailed data on trade and tariff exemptions were reviewed from March 2020 to February 2021.

Because the retaliatory tariffs are still in effect, the report’s estimates do not represent a complete account of all current and future economic losses resulting from these actions. In addition, we estimated direct US export losses to retaliating partners and these estimates did not take into account any offsetting increases in sales to non-retaliating partners (i.e. i.e. trade diversion). However, previous research has suggested that the positive trade diversion effects caused by retaliatory tariffs are small compared to the direct losses (Carter and Steinbach, 2020; Grant et al., 2021).