Trump’s tariff plans targeting China could raise trade tensions

DAILY Bites

• President Trump announced a 10% tariff on China-based imports starting February 1, alongside 25% tariffs on imports from Canada and Mexico.

• U.S. agricultural exports to China reached a record $36.4 billion in FY 2022, but tariffs risk disrupting key trade relationships and triggering retaliation.

• Domestic economic impacts include a potential $78 billion reduction in consumer spending and heightened risks for U.S. businesses operating in China.

DAILY Discussion

President Donald Trump announced plans to implement a 10 percent tariff on China-based imports starting February 1, as revealed during a White House press briefing Tuesday night. The announcement followed promises made following his re-election in November and echoes remarks earlier this week about imposing 25 percent tariffs on imports from Canada and Mexico.

While Trump initially vowed to sign an executive order on his first day to enact tariffs on these trading partners, he issued a memorandum Monday directing federal agencies to evaluate U.S. trade policy. The agencies have until April 1 to recommend remedies, which may include additional tariffs.

Trump justified the proposed tariffs on China by citing concerns over the importation of fentanyl, which he claims is routed through Mexico and Canada. “We’re talking about a tariff of 10 percent on China based on the fact that they’re sending fentanyl to Mexico and Canada,” he said. “Probably Feb. 1 is the date we’re looking at.”



During Trump’s first term, U.S. manufacturers and agricultural exporters experienced the effects of tariffs during a prolonged trade dispute with China. These actions significantly impacted trade with China, the U.S.’s largest agricultural export market.

In FY 2022, U.S. agricultural exports to China reached a record $36.4 billion, driven by higher prices and resilient demand. Key exports included soybeans, beef, corn, and cotton.

China imported $15.06 billion worth of soybeans, 26.39 million metric tons in volume, representing a 4 percent growth over the 10-year average. Beef exports surged to $1.61 billion, marking a staggering 593 percent growth, while corn and cotton exports rose significantly, highlighting their importance in U.S.-China trade.

Despite these record highs, tariffs could disrupt this vital trade relationship. Retaliatory measures from China may target U.S. exports, particularly agricultural products, further straining U.S. producers. Analysts note that China is increasingly resilient, bolstering partnerships with countries less aligned with U.S. policies.

Domestically, tariffs could reduce U.S. consumer spending by $78 billion, according to the National Retail Federation. Legal and financial challenges may also arise for U.S. companies operating in China, potentially leading to blacklisting or legal disputes under China’s anti-foreign sanctions laws.

As the United States reviews its trade agreements, including the United States-Mexico-Canada Agreement set for renegotiation in 2026, Trump’s tariff strategy could redefine trade dynamics with its three largest trading partners. However, any short-term gains may come at the expense of long-term stability in critical sectors like agriculture.