The watch is engraved in trade contracts where the US needs to attack many countries, particularly China, to avoid what Trump’s Treasury Secretary described as an “unsustainable” tariff war. However, damage has already been done in the US agricultural sector and the economic crisis has already begun.
US agricultural exporters say they have punished President Donald Trump’s global backlash against tariffs, particularly for a decline in China’s purchase of US agricultural products, and canceled export orders and layoffs. Peter Friedman, executive director of Agricultural Transport Coreity (AGTC), a leading farmer export industry group, told CNBC that the number of cancelled purchases in U.S. agriculture should not be described as approaching a crisis. “It’s already a full-scale crisis,” he said.
Data released Thursday by the USDA revealed that China has made the biggest cancellation of its pork order since 2020, stopping shipping of 12,000 tonnes of pork.
Based on reports received from member companies, the AGTC states that “massive” financial losses have already been shared by members as a result of the trade war.
The wood pulp and paperboard exporters reported to the trade group an immediate cancellation of 6,400 metric tons of warehouses or a hold of 6,400 metric tons and a hold of 15 rail vehicles, as well as what is known in the supply chain, when fees are charged for delayed movement of goods. Meanwhile, the exporter said there is 9,000 tonnes of water to China, which is expected to arrive on May 13, facing the threat of costly detours to China’s debt warehouses and other countries as Chinese buyers refuse to ship and abandon them at ports.
A grass seed exporter told AGTC that he had two weeks notified that eight loads had been cancelled by Chinese customers despite ship reservations already being installed.
At a recent stakeholder meeting on the impact of tariffs at the Port of Auckland headquarters, Port of Auckland executive director Christa McKenney warned that tariff-induced slump due to slowing imports or retaliatory export losses — ultimately could put employment stability and local economic health at risk.
McKenney cited retaliatory tariffs on US agricultural and manufactured goods as a key export moving through Oakland. Exports include almonds, beef, pork, dairy products and recycled ingredients, many of which are aimed at Asia. China is ranked as the port’s top import trading partner and third export partner, accounting for 29% of Auckland’s total trade volume.
Unlike many US ports that are leaning heavily towards imports, Auckland is unique in maintaining a balance of nearly 50/50 for imports and exports. This makes Oakland worried that tariff retaliation will directly affect its top export destinations (Japan, Taiwan, China, Korea), and that it could significantly erode California’s market share due to its perishable and highly valuable goods.
The Port of Oakland is the number one refrigerated export gateway in the United States, with almost all containerized cargo travelling through Northern California passing through Oakland Port.
“So many local union jobs rely on robust delivery operations at the port, including dock workers, truck operators and warehouse workers,” said Rep. Latefah Simon, D-Calif. “I support smart trade policies that raise Auckland workers and cut costs, not illogical and retaliatory trade wars.”
Agricultural exporters have warned that there is no additional market to quickly replace China’s demand and absorb volumes, which has already affected prices.
“We have diverted our employees and production to other (less profitable) production, dramatically slowing down purchasing from independent vendors (loggers, truckers, sawmills),” reported to AGTC. Wood exporters have said that some products have already reported a 20% decline in market value, which will affect inventory planning and future investments. “The US market was steadily improving, but now it was full of stocks of former Chinese products,” he added.
Feed exporters such as hay and straws, a big business for US farms supplying livestock operations overseas, reported 68 blank sails after Trump’s “liberation day,” limiting ship space for exporting feed ships still being exported at US ports.
“The concern is that the remaining vessel space will become the most expensive/most ‘premium’ service that cannot absorb products without losing their losses.
According to the Vizion Global Ocean Bookings Tracker, China saw a sharp decline in US vessel traffic volume, down 22.15% year-on-year and 44% year-on-year and 44% year-on-year.
“What we’ve seen in the last two weeks is the ongoing revision in reservations of demand, particularly for US import imports,” said Ben Tracy, vice president of strategic business development at Vizion. “We’re now seeing this being converted to a departure drop,” he added.
Hay exporters in central Washington have been told to send massive crop production to Hong Kong and mainland China, reroute most of the exports shipped to Japan, Dubai, Taiwan and several Chinese ports in the past two weeks. These changes are costly for the company and told AGTC “it’s not sustainable and cannot replace all the volumes China buys.”
Hay exporters quickly stopped all orders in the process and began layoffs.
“We had to adjust the employee countdown of 12 people, which accounts for a quarter of the total staff,” he wrote. The company said it has communicated its hopes to “reverse the rushed and reckless decisions at the pinnacle of our country and alleviate the deep troubles we are facing at this point.”
In addition to the tariff rebound, agriculture faces another looming financial challenge with the recently announced ship law measures approved by the US Trade Representative (USTR), where Chinese-made vessels are calling for U.S. ports to charge port fees of more than $1.5 million starting from the fall.
Bulk agriculture was engraved from port fees imposed under USTR regulations, but farming shipped to containers is not exempt from the fees. Friedman said exemptions are essential as the most valuable US agricultural exports are shipped to containers rather than in bulk.
Containerized exports include processed foods such as refrigerated beef, pork, chicken, fruits, vegetables, dairy products and fries. Cotton, feed (hay, alfalfa), nuts, dried dairy products, wood, paper and soybeans are also shipped to containers. “Efforts continue to exempt all agricultural exports, including containerized agriculture,” Friedman said.
Based on US trade data, US agriculture shares moved by containers.
USTR did not respond to CNBC requests for comments regarding fee waiver for containerized farming.
“Many of our future is in the hands of a few,” the hay exporter wrote to AGTC. “We plead the few to see very long and carefully as we look at what we can do to keep our cargo flowing, while solving the perceived imbalances and differences in trade.”