Interview | China-U.S. pesticide trade relations: Navigating complexity in search of new opportunities

This article is first published in the "2025 China Pesticide Industry Watch" magazine. To read more articles from the magazine, please click picture in below.

Since the start of the China-U.S. trade war in 2018, this prolonged dispute has significantly impacted the global economy and trade landscape. 

Chemicals and agrochemicals, as key components of trade between China and the U.S., are now facing challenges related to adjustments in their industry chains amid this competition. 

In early February this year, the Trump administration in the United States announced a plan to impose an additional 10% tariff on all goods imported from China, on top of the existing tariffs. This policy has now been implemented, and all Chinese goods arriving in the United States after March 7, 2025, are subject to the additional 10% tariff. On March 3, the U.S. announced that it would impose an additional 10% tariff on certain Chinese products, on top of the existing 10% tariff. The aggressive policy has drawn widespread attention and concern from global markets.

At the time of the announcement of the new tariff policy in February, AgroPages conducted interviews with several Chinese companies that play a key role in pesticide exports to the U.S., as well as American importers. The goal was to gain insights into how the national-level trade war has impacted their business operations and industry development since 2018, as well as their strategies for adaptation. Overall, Chinese pesticide companies have demonstrated remarkable resilience and sustained growth despite considerable pressures, while American importers have adopted various strategies to manage rising costs. Looking ahead, the agrochemical industry is set to navigate a complex international trade landscape filled with both opportunities and challenges. Both sides are closely monitoring policy changes and are flexibly adjusting their business strategies to adapt to the evolving situation.

The Background and Key Developments of the China-U.S. Trade Tariff War

The China-U.S. trade tariff war started in 2018 when President Trump initiated a ″Section 301 investigation,″ citing unfair competitive practices by China concerning intellectual property protection and market access. This led to the imposition of high tariffs on a wide range of Chinese imports, including chemicals and agrochemical products. In response, China swiftly implemented countermeasures by imposing additional tariffs on U.S.-origin goods, also covering chemicals and agrochemical products. This tariff war significantly increased trade costs for chemicals and agrochemical products between the two countries, squeezing profit margins for companies and disrupting industrial and supply chains.

2018:

•  In March, Trump announced the imposition of additional tariffs on Chinese imports, officially kicking off the trade war.

• On July 6, the U.S. imposed an additional 25% tariff on US$34 billion worth of Chinese products, which led to immediate retaliatory actions from China.

• In August, the U.S. added tariffs on another $16 billion worth of Chinese products.

• On September 24, the U.S. rolled out an additional 10% tariff on $200 billion worth of Chinese products, with intentions to raise the rate to 25% in 2019.

2019:

• In May, the U.S. raised the tariff on $200 billion worth of Chinese products from 10% to 25%.

• In August, Trump announced an additional 10% tariff on $300 billion worth of Chinese products.

• In December, China and the U.S. reached a Phase One trade agreement, leading to the cancellation of some tariffs.

2020:

• On January 15, China and the U.S. signed the Phase One trade agreement.

• In August, the U.S. imposed sanctions on Chinese companies over issues related to the South China Sea.

2021:

• The Biden administration largely maintained the tariff policies from the Trump era and intensified technology restrictions on China with a strategy dubbed ″small yard, high fence.″

2024：

• During his campaign, Trump proposed ″Tariffs 2.0,″ which included plans to impose tariffs of 60% or more on all products from China.

2025：

• On February 1, President Trump signed an executive order establishing an additional 10% tariff on imports from China.

• On March 3, the United States announced an additional 10% tariff on certain Chinese products, on top of the existing 10% tariff.

Accelerating the Restructuring of the Agrochemical Industry Chain

The agrochemical industry has encountered considerable challenges in the context of the China-U.S. trade war. Since 2018, the U.S. has implemented an additional 25% tariff on 113 types of pesticide technicals imported from China and a further 7.5% tariff on 18 other technicals.

In the short term, additional U.S. tariffs on Chinese chemicals have led to a decrease in the market share of related products in the U.S. China’s retaliatory measures, including additional tariffs on chemicals and agricultural products originating from the U.S., have impacted the supply of certain high-end chemicals that rely on imports. Consequently, trade costs for chemicals and agrochemicals between China and the U.S. have increased significantly, placing pressure on businesses’ profit margins.

Analysis of customs data from 2015 to 2024 (see Figure 1) reveals that China's pesticide exports to the U.S. peaked in 2019, driven by U.S. importers stockpiling in anticipation of tariff changes. Although export volumes have declined since 2019, they have remained relatively stable compared to the period before 2019. Meanwhile, India's pesticide exports to the U.S. have experienced significant growth in recent years, partially filling the void in the U.S. market.

This suggests that the impact of the China-U.S. trade war on the agrochemical industry is complex and multifaceted. It has not only influenced trade flows between the two countries. Still, it has also prompted relevant businesses to seek new market opportunities and supply chain strategies to navigate the continuously changing international trade environment.

Figure 1．Trends in US Pesticide Imports and Exports from China and India to the US from 2015 to 2024（t）

Source: Customs data; pesticide products are categorized under HS codes 380891, 380892, and 380893.

From a mid-to-long-term perspective, the China-U.S. trade war has catalyzed the restructuring of the global agrochemical industry and reshaped the competitive landscape. The U.S. government is actively promoting the relocation of the chemical industry chain, urging domestic companies to move production to other countries to reduce dependence on the Chinese market. Concurrently, Chinese enterprises are hastening their transformation towards high-end products and globalization to navigate this new global trade environment.

In terms of market expansion, Chinese companies are actively pursuing opportunities in emerging markets across Europe, Southeast Asia, and the Middle East to lessen their reliance on the U.S. market. Additionally, these companies are boosting their investments in independent research and development, making continuous progress in key technologies to enhance their innovation capabilities.

Notably, amid the dual pressures of trade policies and industrial upgrading, several capable Chinese agrochemical companies have begun relocating their production lines to regions such as Southeast Asia, the Middle East, and South America. This strategy goes beyond mere capacity transfer; it involves deeper strategic considerations, including technology transfer, brand localization, and supply chain restructuring. By shifting production or establishing overseas facilities, these companies can not only reduce their dependence on a single market but also take full advantage of local tax incentives and financial resources. For example, by leveraging the low tax rates and abundant financial opportunities in locations like Singapore, companies can optimize their global cash flow. Furthermore, by setting up production bases in Southeast Asia, they can better meet local infrastructure development needs and effectively mitigate trade risks through re-export activities.

Figure 2 clearly illustrates the activities of listed Chinese enterprises in establishing overseas factories over the past decade, highlighting development trends and vividly reflecting the dynamic changes in the global landscape for these companies. After a brief disruption due to the COVID-19 pandemic in 2021, the number of enterprises investing in overseas factories surged to a new peak in 2023, signaling a more determined commitment by Chinese companies to globalization.

Figure 2. Number of Listed Chinese Enterprises Establishing Overseas Factories and Established Factories from 2010 to 2023.

Source: Public information of listed companies

From a regional perspective, multiple Chinese chemical giants and niche leaders have targeted Southeast Asia for expansion. In 2024, direct investments from Chinese chemical enterprises in Southeast Asia increased by 18% compared to the previous year, making up 35% of their total overseas investments. Additionally, emerging markets such as Morocco, India, and Vietnam are attracting greater multinational investment in the chemical sector, gradually enhancing their production capacities. This shift has the potential to reshape global chemical trade dynamics as these countries transition from being mere importers of chemical products to becoming exporters or achieving self-sufficiency within the region. Such a transformation is likely to influence the flow and direction of global chemical trade, significantly altering the overall landscape of the industry.

Key overseas factory establishment or acquisition projects by Key overseas factory establishment and acquisition projects by Chinese agrochemical companies

• In 2023, Xingfa Group acquired a production facility for paraquat and glyphosate-soluble concentrates in Indonesia.

• In 2023, Lianhetech established a factory in Malaysia.

• In 2024, Rainbow purchased a formulation plant in the U.S.

• In 2024, Hebang Biotechnology began the construction of a 300,000-ton/year glyphosate project in Indonesia.

• In 2025, Rainbow Agro established a formulation production center in Illinois, US.

From the Perspective of Enterprises

- Chinese Pesticide Manufacturers Demonstrate Resilience under Pressure

To thoroughly analyze the specific impacts of the China-U.S. trade tariff tensions on the pesticide industries in both countries, we interviewed a range of industry experts, representatives from Chinese pesticide export companies, and U.S. pesticide importers.

In the earlier interviews, some Chinese companies had believed that the likelihood of the U.S. actually implementing the proposed 10% tariff increase is relatively low. Nevertheless, as a precaution, many have proactively shipped at least six months' worth of products to the U.S. to mitigate potential tariff risks. Throughout the interview process, representatives from these companies shared insights into the specific impacts that recent China-U.S. trade frictions have had on their operations, as well as the strategies they have adopted to adapt. They also provided their perspectives and forecasts regarding potential future trends in the industry.

Jingma Chemicals Co., Ltd. is a large, modern pesticide manufacturer that integrates scientific research, production, and both domestic and international trade. The company primarily produces glyphosate technical material (TC) using the IDA process, in addition to isopropylammonium (IPA) salt and soluble concentrate (SL). According to the company, the U.S. market is significant, accounting for over 20% of its total sales, with glyphosate TC and formulations being its main export products. Since the onset of the trade war, however, the company’s market share in the U.S. has declined. In terms of profits, the impact of China-U.S. trade tensions on costs is minimal, as all raw materials used in production are sourced domestically. However, higher tariffs on formulations have led U.S. customers to prioritize purchasing TC and glyphosate IPA salt 62% SL. This shift reduces the number of deep processing steps and ultimately decreases corporate profits. Additionally, increased costs for customers have resulted in stricter price demands, further squeezing the profitability of the company.

Figure 3 illustrates the export trends of the three main glyphosate products from China to the U.S. from 2018 to 2024. Historically, glyphosate IPA salt 62% SL has represented over 90% of all glyphosate formulation exports, establishing itself as a cornerstone of these exports. Its export volume has shown steady growth since 2018, peaking in 2024 and indicating a robust upward trend. In contrast, the export of technical materials has experienced fluctuations, notably suffering a sharp decline in 2023, followed by a gradual recovery in 2024.

Figure 3. Volume (kg) of Major Glyphosate Exports from China to the U.S. from 2018 to 2024

Source: Customs data compiled by AgroPages

The U.S. is one of the largest pesticide importers globally, and companies are constantly looking for ways to enhance their competitiveness in this market. Recently, Jingma Chemicals announced the construction of a production line for PMIDA with an annual capacity of 20,000 tons. The product of this facility will be dedicated exclusively to producing 15,000 tons per year of glyphosate technical concentrate (TC) by the company. This initiative aims to streamline the production chain for glyphosate products and strengthen the competitiveness of its core offering, glyphosate TC. Xingfa Group, a leading player in the glyphosate sector, has taken the initiative to explore the U.S. market. In recent years, Xingfa Group has aggressively promoted its own end brand, Xsate, in the U.S. By shifting the product value chain downstream, the company has gained greater control and reinforced its dominance in the market.

Maxunitech ranks among the top 20 pesticide exporters in China and has achieved significant success in independently developing compounds and innovating products. The company has established a solid presence in the U.S. market. A representative from Maxunitech noted that the proposed ″reciprocal tariffs″ policy in the U.S. has not yet been fully implemented, making it challenging to thoroughly assess its impact on China’s pesticide industry. Nonetheless, U.S. tariff policies will undoubtedly have far-reaching effects on the global market and supply chain restructuring. In this context, Chinese enterprises are well-positioned to overcome challenges by adopting strategies such as ″technological innovation″ and ″going global.″ Maxunitech plans to maintain its focus on research and development, including the potential establishment of overseas factories when suitable locations are identified, to enhance its competitiveness. The company firmly believes that strengthening its own capabilities is essential for mitigating risks and achieving sustainable development.

A senior industry expert from China emphasized that the Chinese pesticide industry has not been crippled by additional tariffs imposed over the past five years, underscoring the industry’s resilience.  He pointed out that while the volume and value of Chinese exports to the U.S. have not seen drastic declines, the composition of exported product categories has shifted. For instance, pyrethroid products from India have increasingly entered the U.S. market in recent years, resulting in a decrease in Indian exports to other regional markets. This change has opened the door for Chinese companies to leverage China’s production capacity.

The additional 10% tariff on all products exported from China to the U.S. will undoubtedly affect Chinese enterprises. However, the U.S. market continues to rely heavily on pesticides sourced from China. If the U.S. government does not create special exemption channels for pesticides, it could result in another shift in the types of products exported from China to the U.S. In this context, changes in supply dynamics between China and India could have significant implications for China-U.S. trade relations. It remains uncertain whether India can seize this opportunity to emerge as a key player in the competitive landscape between China and the U.S. Such a transformation could not only reshape India’s share in the global market but also have profound long-term effects on its domestic economic development.

- U.S. importers: Costs Passed Down to Farmers, Agriculture Affected Negatively

U.S. importers have expressed skepticism about the government’s trade policies. Several companies we spoke with highlighted the need for the government to prioritize the interests of domestic importers when formulating trade policies. They emphasized the importance of considering various factors, particularly the availability of mature and cost-effective alternatives within the supply chain. Additionally, the U.S. government should be mindful of the safeguards that other countries provide to their exporters and assess whether any barriers have been put in place to restrict U.S. imports.

As for the impact of increased tariffs, the importers we interviewed indicated that these policies have directly affected their operations, resulting in higher costs, disruptions in the supply chain, and declining sales, which could potentially contribute to inflation.

Nearly all respondents indicated that any increase in the cost of goods sold (COGS) due to trade tariffs must be passed on to customers, who then transfer these costs to farmers. This chain reaction ultimately undermines farmers’ interests. Some interviewees noted that U.S. farmers are already grappling with significant challenges as their global competitive position continues to decline.

This issue is reflected in a report from the U.S. Department of Agriculture (USDA) released in October 2024, which highlighted that U.S. farmers faced widespread losses in 2024 due to persistently low agricultural prices coupled with rising production costs. Data from the Farm Business Farm Management (FBFM) of Illinois, a key agricultural state, indicates that the average non-land cost of producing corn in Illinois from 2014 to 2019 was $587 per acre. By 2024, this cost is projected to rise to $772 per acre, representing a 31.5% increase. Similarly, during the same period, the non-land cost for soybeans is expected to climb from an average of $363 per acre to $512 per acre by 2024, reflecting a 41.0% increase.

Some importers have already implemented or are planning to implement a range of measures to address the challenges they face. For example, they are stockpiling essential raw materials. To avoid tariffs, importers are compelled to accumulate these materials before higher tariffs come into effect, highlighting the distinctive position that Chinese suppliers have maintained regarding their product delivery capabilities and their role in the global supply chain. Additionally, some importers have indicated that they have informed their customers about the potential necessity for price increases. In the case of bulk pesticide products like glyphosate, importers are actively taking steps to protect their interests. For instance, one company has announced its intention to participate in an upcoming hearing in Washington to seek tariff exemptions for glyphosate TC. Furthermore, some importers noted that unless China is the sole supplier of a specific product, or if the product remains cost-effective even after tariffs are imposed, they may consider sourcing from other countries.

In discussing the future trajectory of China-U.S. trade relations, some respondents drew a striking analogy, comparing the competition to the notorious incident involving Tonya Harding and Nancy Kerrigan in sports history. Tonya Harding was once a promising figure skating star in the U.S., aiming for glory at the World Championships and the 1994 Winter Olympics. However, her husband, Jeff Gillooly, and others conspired to attack her main rival, Nancy Kerrigan, resulting in Kerrigan suffering a knee injury. This scandal abruptly ended Harding’s skating career, while Kerrigan ultimately went on to win an Olympic medal. Following the incident, Harding faced public disgrace and condemnation. Essentially, this competition undermined fairness and dignity. As an emerging power, China seeks fairness and peace in this competitive landscape, but other major powers may not share the same viewpoint. 

Nevertheless, importers remain hopeful that commercial rationality will prevail over political sentiment in government policymaking. While they are taking various measures to navigate these challenges, they also expect the government to safeguard their interests and foster fair competition.

Regionalization of Industrial Chains Will Intensify

As of 2024, average U.S. tariffs on Chinese goods stand at around 21%. If Trump Tariffs 2.0 is implemented, it will significantly impact bilateral trade between China and the U.S. Moving forward, the restructuring of the global industrial chain under the strong influence of trade policies will continue to affect the chemical and agrochemical sectors, making the trend toward regionalization even more pronounced. Companies will increasingly prioritize localized production and supply chain security. At the same time, emerging technologies such as green chemistry and biotechnology will drive the industry towards a more sustainable future. In the realms of chemicals and agrochemicals, China and the U.S. will navigate a landscape of both competition and cooperation, ultimately striving for win-win partnerships amid the competitive dynamics.

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