The retaliatory duties imposed on U.S. farm exports as a result of the Trump administration's tariffs cost the American ag sector $27 billion from mid-2018 through 2019, according to a new analysis by USDA's Economic Research Service.

The study shows that U.S. soybean, sorghum and pork exports were the hardest hit by the retaliatory tariffs, and farmers in the Midwest bore the majority of those losses.

The U.S. first levied Section 232 tariffs on a slew of countries to punish them for steel and aluminum exports to the U.S., a situation the U.S. said was threatening national security. Next, the U.S. hit China with Section 301 tariffs after talks for a trade deal faltered.

Canada and Mexico were at first spared the Section 232 tariffs, but that changed when trade negotiations to rewrite the North American Free Trade Agreement soured. Both Mexico and Canada retaliated, but the Mexican tariffs hit U.S. ag particularly hard. Mexico levied new import taxes on U.S. cheese, pork, potatoes, apples and other commodities. The tariffs started out as 10-15% and then rose to 20-25%.

The U.S. cancelled the Section 232 tariffs on Mexico and Canada after a deal was reached on the FTA. The Mexican and Canadian tariffs also ended, but retaliatory duties levied by China are still in place.

The U.S. Section 301 tariffs on Chinese goods as well as the Chinese retaliatory tariffs are still in place, although China has been exempting many of its importers from the taxes since it signed the U.S.-China Phase One Economic and Trade Agreement.

The ERS analysis breaks down the damage of retaliatory tariffs for the year-and-a-half period into U.S. commodities and regions.

Chinese retaliatory tariffs were by far the most damaging to U.S. exports during the year-and-a-half time frame, ERS data shows. The Chinese taxes on U.S. ag resulted in $25.7 billion in losses, compared to $600 million in losses from EU tariffs, $500 million in losses from Mexican tariffs and $100 million in losses from tariffs levied by Canada, India and Turkey.

On an annualized basis the overall damage was about $13.2 billion in ag export losses, says ERS.

Lost soybean exports made up 71% of the damage, equaling $9.4 billion in annualized losses, according to ERS, while 6% of the losses were suffered by sorghum producers and 5% by pork producers.

The ag sectors in Iowa, Illinois and Kansas were the hardest hit, according to the study.

“In 2020, U.S. agricultural exports to China significantly rebounded following the signing of the U.S.-China Phase One Economic and Trade Agreement … and a separate retaliatory tariff waiver program,” ERS said in the report, but also stressed that that U.S. market share of China was still below “pre-retaliatory tariff levels” one year after the “phase one” deal.

“China resumed purchasing soybeans in early 2019, but purchasing levels were less than pre-2018,” ERS said. “Soybean losses were economically devastating given both the size of the value of U.S. production and the level of dependence on the Chinese market.”

The Trump administration doled out $28 billion in trade assistance packages over two years with the bulk of the funds going to direct payments under the USDA’s Market Facilitation Program.