President Donald J. Trump's administration has announced two significant trade agreements with China and the United Kingdom, aiming to reshape international trade dynamics and potentially influence the U.S. grain industry.

U.S.-China Trade Agreement

On Monday, May 12 the United States and China reached a bilateral agreement to reduce tariffs by 115% for a 90-day period, while maintaining a 10% baseline tariff. This agreement, effective by May 14, includes China's suspension of retaliatory tariffs imposed since April 4, 2025, and the removal of non-tariff countermeasures enacted since April 2, 2025.

The U.S. will suspend its 34% reciprocal tariff imposed on April 2, 2025, for 90 days but will retain a 10% tariff during this period. Other existing tariffs, including those under Section 301 and Section 232, will remain in place. The White House

U.S.-UK Trade Agreement

In a separate development, the U.S. and the UK have established a trade framework that reduces tariffs and expands market access. Key provisions include:

  • UK removal of tariffs on U.S. ethanol exports, facilitating up to $700 million in American exports
  • UK agreement to import 13,000 metric tons of U.S. beef tariff-free
  • Reduction of U.S. tariffs on British cars from 27.5% to 10% for up to 100,000 vehicles annually
  • Elimination of U.S. tariffs on British steel and aluminum

This agreement is projected to create a $5 billion opportunity for new U.S. exports, including agricultural products such as beef and ethanol.

Implications for the Grain Industry

These trade agreements may have several implications for U.S. grain handlers, operators, and merchandisers:

  • Market Access: The reduction of tariffs and removal of retaliatory measures by China could lead to increased demand for U.S. grain exports, particularly soybeans and corn, enhancing market opportunities for U.S. producers.
  • Ethanol Exports: The elimination of UK tariffs on U.S. ethanol exports may boost demand for corn-based ethanol, potentially increasing corn utilization and supporting corn prices.
  • Beef Exports: The UK's commitment to import U.S. beef tariff-free could lead to higher demand for feed grains used in cattle production, indirectly benefiting grain producers.

Ag Industry Sentiment

According to the Purdue University-CME Group Ag Economy Barometer, 70% of farmers expect President Trump's tariffs to strengthen the agricultural economy in the long term. Farmer sentiment improved in April, with the Farm Capital Investment Index reaching its highest reading since May 2021.

The recent trade agreements with China and the UK represent significant developments in U.S. trade policy, with potential positive impacts on the grain industry. Grain handlers, operators, and merchandisers should monitor these changes closely to capitalize on emerging opportunities in international markets.