Key U.S. Industries Facing Major Setbacks from China's Tariff Retaliation

Image Credit: Reuters

China’s latest move to impose sweeping 34% tariffs on all U.S. goods in retaliation to President Donald Trump’s trade measures is expected to significantly impact various American industries—particularly aviation, semiconductors, farm equipment, and agriculture.

Aviation Sector: Boeing in the Crosshairs

Boeing is likely to be hit hard, as the new tariffs could make its aircraft considerably more expensive than competitors like Airbus and China’s COMAC. While Boeing avoided Chinese tariffs during the earlier trade war, its sales to China suffered following two fatal crashes of its MAX 8 aircraft and rising geopolitical tensions. Although China resumed Boeing imports in January 2024, full-scale deliveries only began mid-year.

Now, the country’s three largest carriers—Air China, China Eastern, and China Southern—are scheduled to receive 45, 53, and 81 Boeing planes respectively between 2025 and 2027, all of which may face uncertainty due to increased costs.

Semiconductors: Intel and Micron Vulnerable

China buys around $10 billion in chips from the U.S. annually, with Intel CPUs—primarily used in laptops and servers—accounting for about $8 billion. China was Intel’s biggest market in 2024, making up 29% of its total revenue.

Micron may also be affected, although it has manufacturing plants both in China and abroad. Meanwhile, Nvidia is largely shielded as its AI chips destined for China are produced and assembled in Taiwan by TSMC, and thus are not subject to the tariffs.

Farm Equipment: Additional Pressure

The U.S. farm machinery sector faces increasing pressure as the new 34% tariffs come on top of a previous 10% levy from March. This affects leading companies such as Caterpillar, John Deere, and AGCO, all of which export farm equipment to China.

Agriculture: Most Affected Sector

U.S. agriculture is likely to bear the brunt of China’s retaliation, with China being a top market for American farm exports. Beyond tariffs, Beijing also suspended import approvals for sorghum from C&D (USA) Inc. due to alleged food safety issues. Imports of poultry meat and bone meal from companies such as American Proteins, Mountaire Farms of Delaware, and Darling Ingredients were also halted, along with poultry products from Mountaire and Coastal Processing

 

 

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author