After China unveiled steep retaliatory tariffs on U.S. exports Wednesday, Treasury Secretary Scott Bessent issued a sharp and somewhat surprising response: “So what?”

The question underscored the Trump administration’s argument that America has the upper hand in a trade war with China, given how reliant its economy is on exports to the United States.

The United States buys far more goods from China than China buys from the United States. But Beijing’s decision to retaliate against President Donald Trump’s punishing tariffs by raising levies on U.S. imports to 84% could sting more than Bessent let on.

“American companies that have been selling to China, and have been enormously successful doing that, are not going to be able to do that because of Chinese retaliation,” Sean Stein, the president of the U.S.-China Business Council, said in the hours before Trump ratcheted up his tariffs again.

“Tariffs on the Chinese side and the U.S. side cover everything,” Stein added, meaning everything from aviation to medical imaging to agriculture would be affected, and “trade is going to slow,” he said.

The U.S. exported $143.5 billion of goods to China last year and imported $438.9 billion from that country, according to the Office of the U.S. Trade Representative.

Soybeans could take a hit

The loss of China as an export market will deal a particularly hard economic blow to agricultural workers in several red states, hitting many of the voters who helped Trump win the presidential election.

The first trade war with China, which lasted from 2018 to 2019, resulted in billions of dollars of lost revenue for American farmers. To help offset the losses, Trump handed out $23 billion in subsidies from a fund that the Department of Agriculture created to stabilize the farm sector. Large farm operations and farmers in the South benefited the most, fueling concerns about fairness and leaving some farmers feeling cheated.

The soybean industry is one of the sectors most concerned about the current tariff retaliation. China is America’s largest soybean export market, but when Trump imposed tariffs on Chinese goods during his first term, Beijing retaliated by buying soybeans from other countries, including Brazil.

“If this lasts long term, we’re going to have a significant number of farmers going out of business,” said Caleb Ragland, a Kentucky farmer who is president of the American Soybean Association. “We still bear scars from the last trade war.”

The American Soybean Association has been urging the Trump administration to strike a new trade deal with China to avoid a long-term trade war.

U.S. corn farmers, who sell about 2% of their products to China, have also been on edge about the trade fight. They welcomed Trump’s decision to pause punishing tariffs on other countries that could have led to more retaliation on farmers and other U.S. businesses. But they urged the Trump administration to focus on negotiations that open up market access.

“The longer that uncertainty exists, the more concerned we become that our growers could harvest billions of bushels of corn for which they will not have reliable markets,” said Kenneth Hartman Jr., president of the National Corn Growers Association. “Our farmers want certainty that our customers at home and abroad will buy our products in the months and years ahead.”

GOP concerns

Anxiety over the impact of the tariffs was evident Wednesday as Jamieson Greer, the U.S. trade representative, testified before the House Ways and Means Committee and faced questions from Republicans who were nervous about retaliation from other countries against U.S. farm exports.

Rep. Darin LaHood, R-Ill., said that he appreciated what Trump was doing to address long-standing trade barriers but that his constituents were concerned.

“As I talk to my farmers, there’s a lot of anxiety, a lot of stress, a lot of uncertainty, because when we get into a trade war, usually the first pawn in the trade war is agriculture,” he said.

Greer responded that “almost all countries have announced that they’re not going to retaliate,” except for China. Indonesia, India and many other countries “have affirmatively said we’re not retaliating,” he added, while some countries, like Vietnam, have unilaterally offered to lower tariffs on U.S. farm products. Greer did not mention that Europe announced retaliatory measures Wednesday or that Canada had retaliated against previous rounds of tariffs.

Bailouts being considered

Bessent downplayed the impact of China’s response Wednesday morning, arguing on the Fox Business Network that the United States exports relatively little to China.

“China can raise their tariffs, but so what?” said Bessent, who owns as much as $25 million of North Dakota farmland that he must divest.

The retaliation could force the Trump administration to revive the bailouts to American farmers that were offered during the president’s first term.

Brooke Rollins, the agriculture secretary, said Wednesday that such a relief package was being considered and that “everything is on the table.”

At a White House Cabinet meeting Thursday, Rollins noted that farmers and ranchers had been struggling because of inflation and were concerned about uncertainty over trade but that they supported Trump’s economic agenda.

“Your idea of using tariffs to ensure that we are putting forward and putting America first, no one understands that better than our farmers and our ranchers,” Rollins said. “The period of uncertainty that we’re in, they know that your vision will move us into an age of prosperity.”

Trump offered little clarity Thursday about a truce with China but expressed general optimism about the economic relationship

Asked about the potential for a deal with China, Trump said he expected that “we’ll end up working out something that’s very good for both countries.”