IndustryWhat will be the impact of imposing a 34% tariff on American products on China's corn market in the future
On April 4, 2025, the Tariff Commission of the State Council issued a notice announcing the imposition of a 34% tariff on imported goods originating in the United States starting from April 10. Previously, on April 2nd, the US unilaterally imposed "equivalent tariffs" on Chinese goods imported to the US, and China's countermeasures were quickly implemented. As an important area of trade friction between China and the United States, what impacts and opportunities will the corn market face? This article provides you with an in-depth interpretation.
1、 Tariffs increase: US corn import costs soar, import volume may return to zero
1. Tax rate superposition leads to a sudden increase in cost pressure
This time, China has imposed a 34% tariff on imported goods from the United States, which, combined with the previous 15% tariff on corn and other goods (the off quota tax rate has increased from 65% to 80%), will significantly increase the comprehensive tax rate on US corn to 114% (80%+34%). Based on the current exchange rate and cost calculation, the landed dutiable price of US corn will far exceed the domestic spot price (about 2280 yuan/ton for corn in Guangdong Port), completely losing its price advantage.
2. The import volume continues to shrink
In 2024, China imported only 2.07 million tons of corn from the United States, accounting for 15.2% of the total annual imports, and the procurement volume in the second half of 2024 has dropped to an extremely low level (less than 500000 tons per month). After the tax increase, the import volume of US corn may approach zero, and domestic corn supply will rely more on domestic production and regions such as South America and Ukraine.
2、 Domestic market: self-sufficiency rate increases, prices may be supported
1. The self-sufficiency rate of domestic corn exceeds 95%
In 2024, China's corn production will reach 295 million tons, with imports accounting for only 4.4% of the total domestic supply, of which less than 1% will be American corn. Domestic corn has completely dominated the market supply and demand, and the impact of tariffs is more reflected in the emotional boost.
2. The cost of replacing grains is rising synchronously
China has simultaneously imposed tariffs (15%, 10%) on US wheat and sorghum, pushing up prices of alternative grains. For example, after the import cost of sorghum in the United States increases, feed companies may turn to domestic wheat or corn, indirectly benefiting corn consumption.
3. Adequate policy grain storage and controllable price fluctuations
Domestic policies such as high inventory of rice and imported reserve corn can effectively fill the supply-demand gap and curb the significant rise in corn prices.
3、 Industrial chain impact: Feed companies adjust formulas, accelerate biological breeding
1. Diversified feed formulas
Enterprises may increase the use of soybean meal reduction and substitution technologies (such as rapeseed meal and cottonseed meal), optimize low protein diet formulas, and reduce dependence on imported soybeans and corn.
2. Domestic substitution acceleration
The policy is forcing the domestic corn yield to increase, and the commercialization process of genetically modified corn is expected to accelerate, which will enhance the competitiveness of domestic corn in the long run.
4、 Global Landscape: US Export Shifts, China's Supply Chain Diversifies
1. Pressure on US corn exports
After losing the Chinese market, US corn may shift to traditional buyers such as Mexico, but global supply and demand are still affected by factors such as South American weather and geopolitics.
2. The import volume continues to shrink
In 2024, China imported only 2.07 million tons of corn from the United States, accounting for 15.2% of the total annual imports, and the procurement volume in the second half of 2024 has dropped to an extremely low level (less than 500000 tons per month). After the tax increase, the import volume of US corn may approach zero, and domestic corn supply will rely more on domestic production and regions such as South America and Ukraine.
2、 Domestic market: self-sufficiency rate increases, prices may be supported
1. The self-sufficiency rate of domestic corn exceeds 95%
In 2024, China's corn production will reach 295 million tons, with imports accounting for only 4.4% of the total domestic supply, of which less than 1% will be American corn. Domestic corn has completely dominated the market supply and demand, and the impact of tariffs is more reflected in the emotional boost.
2. The cost of replacing grains is rising synchronously
China has simultaneously imposed tariffs (15%, 10%) on US wheat and sorghum, pushing up prices of alternative grains. For example, after the import cost of sorghum in the United States increases, feed companies may turn to domestic wheat or corn, indirectly benefiting corn consumption.
3. Adequate policy grain storage and controllable price fluctuations
Domestic policies such as high inventory of rice and imported reserve corn can effectively fill the supply-demand gap and curb the significant rise in corn prices.
3、 Industrial chain impact: Feed companies adjust formulas, accelerate biological breeding
1. Diversified feed formulas
Enterprises may increase the use of soybean meal reduction and substitution technologies (such as rapeseed meal and cottonseed meal), optimize low protein diet formulas, and reduce dependence on imported soybeans and corn.
2. Domestic substitution acceleration
The policy is forcing the domestic corn yield to increase, and the commercialization process of genetically modified corn is expected to accelerate, which will enhance the competitiveness of domestic corn in the long run.
4、 Global Landscape: US Export Shifts, China's Supply Chain Diversifies
1. Pressure on US corn exports
After losing the Chinese market, US corn may shift to traditional buyers such as Mexico, but global supply and demand are still affected by factors such as South American weather and geopolitics.
2. Diversified sources of imports in China
In 2024, China's corn imports from Brazil will account for 47%, while Ukraine will account for 34%. In the future, we will further consolidate cooperation with emerging supply countries and reduce risks in the single market.
The increase in tariffs this time is a necessary countermeasure for China to safeguard its rights and interests. In the short term, it may trigger a bullish sentiment in the market towards corn prices. However, with sufficient domestic supply and strong policy regulation, the corn market will maintain stable operation. In the long run, policies will accelerate the domestic self-sufficiency strategy for grain and promote the transformation of the corn industry towards high quality and high efficiency.
Corn market, organic amidst danger! Only by paying attention to policy trends and industrial upgrading can we seize future opportunities.
