Tariff spat threatens ag trade
When President Donald Trump followed through Thursday on his threat to impose $60 billion in tariffs on aluminum and steel and sanctions on China, even as Iowa agricultural interests were wrapping up their latest outreach to the communist superpower, the immediate reaction confirmed farmers’ fears.
China’s commerce ministry today proposed reciprocal tariffs on 128 U.S. products worth a combined $3 billion, including pork, wine, fruit and steel, CNBC reported.
“We don’t want a trade war, but we are not afraid of it,” said ministry spokeswoman Hua Chunying, quoted by the Associated Press.
Iowa Soybean Association President Bill Shipley, who was in China on a weeklong trade mission, warned Thursday that Trump’s move will jeopardize more than three decades of efforts to improve trade with the world’s most populous nation.
“No winners emerge from a trade war, and that’s particularly true when it involves food and nutrition,” said Shipley, who farms near Nodaway in southwest Iowa. “It’s very clear from our conversations this week in China that our most important customer of U.S. soybeans doesn’t desire a trade war. The people just want to do business. So, too, do Iowa and U.S. farmers, particularly as we prepare to go to the fields and plant what could be a record number of acres.”
Shipley is part of a delegation that made stops in Beijing, Wuhan City, Zhanjiang and Shenzhen to promote agricultural trade.
China, with a population of more than 1.4 billion, imports 62 percent of global soybean production. Nearly 39 percent of China’s soybean imports come from the United States, with a value of nearly $14 billion.
In the past five years, farm income has declined 50 percent while crop prices have dropped 40 percent, the association reported.
“A trade war with China involving soybeans would be devastating,” said soybean association CEO Kirk Leeds. “With U.S. commodity prices struggling and other countries ramping up soybean production, this is precisely the wrong time for the U.S. to retreat as a trusted source of high-quality soybeans. South America will be the primary beneficiary if we do.”
Last year, Iowa soybean farmers produced 562 million bushels of the oilseed valued at more than $5 billion.
Reuters reported that buyers of U.S. soybeans are quietly making contingency plans. Soybeans are the top U.S. export to China, but some Chinese businesses plan to switch to rapeseed oil at least temporarily.
Reuters noted that the tariffs on soybeans are a particularly powerful political punch because Trump carried one of the nation’s top soybean producers, Iowa. In addition, current U.S. Ambassador to China Terry Branstad was the longest-serving governor of Iowa.
To read more about Iowa’s global trade efforts, read Managing Editor Perry Beeman’s story (Insider).