U.S.-China Trade War Eases: President Trump Considers Reducing Tariffs, the CBOT Agricultural Futures Rise Driven by Rising Ethanol Demand

Taiwan • Business • 04/24 23:02
U.S.-China Trade War Eases: President Trump Considers Reducing Tariffs, the CBOT Agricultural Futures Rise Driven by Rising Ethanol Demand

In late April 2025, signs of easing tensions in the US-China trade war emerged. President Trump is considering reducing the high tariffs imposed on Chinese goods and possibly adopting a tiered taxation system. Chinese customs reportedly notified that some US-made chips would be exempt from the 125% retaliatory tariff. The three major agricultural futures on the Chicago Board of Trade saw an increase due to US ethanol production hitting a three-week high, an increase in corn usage, a decline in ethanol inventories, and the diversification of China's corn import sources impacting US exports.

Key Updates

04/25 14:00

China cancels order for 12,000 tons of U.S. pork, setting a new record since the pandemic and affecting U.S.-China trade and shipping costs.

In April 2025, trade tensions between China and the United States intensified as China canceled an order for 12,000 tons of American pork, marking the highest cancellation level since 2020 and leading to a 72% drop in U.S. pork exports. This move was a counteraction to the United States' high tariff policies and accelerated China's shift towards sourcing from countries such as Brazil. Meanwhile, the Shanghai Containerized Freight Index fell for two consecutive weeks. Despite a sharp 40% decrease in cargo volume on routes from mainland China to North America, freight rates saw a slight increase, indicating a combination of market supply-demand adjustments and a cautious wait-and-see approach.

04/25 10:02

Evergreen Marine Corporation General Manager Wu Kuang-hui: Shipping demand remains stable, making good progress in signing long-term contracts for the North American route

On April 25, 2025, Evergreen Marine's General Manager Wu Guanghui stated at a corporate briefing that despite the global economic slowdown and US-China trade tensions, the demand for maritime transport has remained steady, with only fluctuations in the growth rate. Evergreen has completed long-term contracts with major North American clients and expects to finalize contracts with small and medium-sized clients by the end of the month. First-quarter revenue increased by 24%, driven by rising freight rates and volume. The company is tackling market uncertainties by adjusting routes and controlling costs to stay competitive.

04/25 09:02

China Considers Exempting Some U.S. Goods from Tariffs: Medical Equipment and Industrial Chemicals on the List, Aviation Sector Could Benefit

The Chinese government is considering suspending the collection of retaliatory tariffs of up to 125% on certain U.S. imports, with the exemption list including medical equipment, industrial chemicals such as ethane, and aircraft leasing. This move could ease cost pressures on China's aviation and manufacturing sectors. Although the Chinese Ministry of Foreign Affairs has not yet officially confirmed this, companies have been requested to submit product customs codes, indicating that policy adjustments are in progress.

04/25 04:31

Trump temporarily halts reciprocal tariffs policy; companies like DHL and Walmart adopt strategic suspensions in response.

On April 9, President Donald Trump announced a temporary delay of the reciprocal tariff policy originally set to take effect in July, allowing a 90-day negotiation period for various countries. This move temporarily eases trade tensions, but companies like DHL, Walmart, and Caterpillar face uncertainty and are taking strategic pauses, adjusting their business models to reduce the impact. DHL is pausing high-value B2C shipments, Walmart and Target are pausing sales of Chinese-made private labels, and Caterpillar is postponing capital expenditures. Companies are seeking stability and opportunities amidst the uncertainty of the policy.

04/25 03:04

The United States is considering waiving tariffs on auto parts, opening up new export opportunities for manufacturers in Taiwan.

The White House confirmed on April 23, 2025, that President Trump is considering granting tariff exemptions on certain auto parts, covering steel and aluminum, imported parts from China, and non-American components of auto parts. This move has attracted attention from the global automotive supply chain, especially from Taiwan's auto parts industry, as it could open up opportunities to enter the U.S. market. Taiwanese businesses and government agencies stated that if the policy is enacted, it would help stabilize shipments, expand market share, and strengthen partnerships with U.S. distributors.

04/24 23:02

U.S.-China Trade War Eases: President Trump Considers Reducing Tariffs, the CBOT Agricultural Futures Rise Driven by Rising Ethanol Demand

In late April 2025, signs of easing tensions in the US-China trade war emerged. President Trump is considering reducing the high tariffs imposed on Chinese goods and possibly adopting a tiered taxation system. Chinese customs reportedly notified that some US-made chips would be exempt from the 125% retaliatory tariff. The three major agricultural futures on the Chicago Board of Trade saw an increase due to US ethanol production hitting a three-week high, an increase in corn usage, a decline in ethanol inventories, and the diversification of China's corn import sources impacting US exports.

04/24 21:30

2025 Shortage of Retail Goods in the U.S.: How Trade War Tariff Policies Affect the Market in Phases

In the spring of 2025, the United States faced a shortage of consumer goods due to a trade war, affecting clothing, footwear, toys, and home goods. On April 2, the Trump administration imposed a 145% tariff on goods from China and an additional 10% tariff on all imports, with some tariffs deferred for 90 days. The supply chain breakdown led to empty shelves, and retailers like Target and Walmart warned of product shortages. The U.S. eliminated the duty-free threshold, affecting small and medium-sized retailers as well as e-commerce platforms. Supply chain pressures are expected to persist through the summer peak season.

04/24 18:01

Impact of US Inflation and Tariff Policies on the Economy: Experts Advise Increasing Savings, Nissan Predicts Record High Net Loss for 2024

The IMF report indicates that the U.S. economic growth forecast for 2025 has been lowered to 1.8%, with inflation expected to increase to 3%. Tariff revenue might reduce the fiscal deficit in the short term, but its dampening effect on imports and consumption is causing concern. Experts suggest that people should increase their emergency savings to cover 9 to 12 months. Nissan forecasts a net loss of 750 billion yen for the 2024 fiscal year, attributed to asset impairment, restructuring expenses, and the effects of U.S. tariff policies on North American market sales.

04/24 09:02

Nestlé and Unilever Revise U.S. Market Pricing Strategy to Counter Weak Consumer Confidence

Nestlé and Unilever have adjusted their pricing strategies in the U.S. market due to weakened consumer confidence and heightened price sensitivity. Nestlé has lowered its prices by 1%, while Unilever has slightly increased prices by 2.1% to tackle competition from store brands. Data from Nielsen and McKinsey indicate that consumers are turning to lower-priced alternatives, prompting brands to rethink their pricing strategies.

04/24 09:02

Boeing's losses narrowed to USD 31 million in the first quarter of 2025, leading to a 6% rise in its stock price due to better-than-expected performance.

In Boeing's first quarter 2025 financial report, despite U.S.-China trade tensions leading to China suspending the reception of new aircraft, Boeing narrowed its losses to $31 million, a decrease of over 90% compared to the same period last year, thanks to an increase in commercial aircraft deliveries and improved operational efficiency. As a result, Boeing's stock price rose by 6.06% on April 23. Boeing CEO Dave Calhoun stated that the company is advancing its recovery plan and considers 2025 a key year for transformation.

Signs of Adjustment in US-China Tariff Policy

The US-China trade war has been intensifying since 2018, with both sides imposing high tariffs on each other. According to The Wall Street Journal, the average tariff rate on Chinese goods by the US has reached 145%, while China's retaliatory tariffs on US goods have increased to 125%. However, both sides have recently signaled intentions to ease tensions.

On April 23, US President Trump stated that the current high tariffs on Chinese goods "will not be the final version" and hinted that tariffs could "drop significantly," with rates possibly adjusting to between 50% and 65%. US Treasury Secretary Bessent also noted that the 145% tariff level is "unsustainable," suggesting a potential policy shift.

Meanwhile, China has also shown signs of goodwill. According to Fast Technology, China's customs have internally notified that certain US-made chips (such as HS CODE 854231, 854233, 854239) will be exempt from the 125% retaliatory tariffs. Only chips with access functions under 854232 will remain taxed. Although not officially announced, several companies have received notifications from local customs, including in Kunshan, Zhongshan, and Shenzhen.

CBOT Agricultural Futures Increase, Ethanol Demand as Key Driver

Amid changes in trade policy, the three major CBOT agricultural futures increased across the board on April 24. July corn futures increased by 1% to $4.84 per bushel, July wheat rose by 0.2% to $5.4450 per bushel, and July soybeans climbed by 1.1% to $10.62. Market analysis indicates that, in addition to expectations of easing trade tensions, anticipated demand growth from regions other than China is also a major driving force.

Data released by the US Department of Energy on April 23 showed that as of the week ending April 18, US ethanol daily production reached 1.033 million barrels, a three-week high, up 2.1% from the previous week and 8.3% from the same period last year. It is estimated that the weekly corn usage for ethanol production was 108.5 million bushels. The US Department of Agriculture estimates that the total corn used for ethanol in the 2024/25 season will reach 5.5 billion bushels, accounting for 43% of domestic corn consumption.

Additionally, the daily net input of ethanol blending also rose to 921,000 barrels, supporting demand. Daily gasoline demand also increased from 8.462 million barrels the previous week to 9.414 million barrels, above last year's 8.423 million barrels. The ethanol blending rate remains at 10.3%, in line with the US E10 gasoline standard.

Ethanol Inventory Decline and Export Changes

As for ethanol inventory, as of April 18, the total US ethanol inventory decreased by 1.3 million barrels to 25.5 million barrels. The Midwest region's inventory decreased by 500,000 barrels to 10.6 million barrels, while the Gulf Coast and West Coast regions decreased by 500,000 and 200,000 barrels, respectively. This trend of declining inventory reflects stable domestic demand and supply adjustments.

However, ethanol exports have declined. The daily average ethanol export volume for the week was 75,000 barrels, down 62,000 barrels or 2.1% from the previous week. Despite this, the total US ethanol exports in the first half of the 2024/25 season have exceeded 1 billion gallons, a 27% increase from the same period last year.

China's Diversification of Corn Imports Affects US Exports

Despite strong ethanol demand, US corn exports face challenges. Since the trade war began in 2018, China has actively diversified its corn import sources. In 2023, corn imports from Brazil and Ukraine accounted for 46.5% and 35% of China's total imports, respectively, while the US market share has dropped to 16%.

This trend puts pressure on US corn exporters, especially in the face of fluctuating demand or policy changes in the Chinese market. If China further reduces imports from the US, it will force US exporters to seek alternative markets.

References

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