The United States and China sat down at the table on Monday. The two most powerful economies in the world have been locked in a trade war for over six months. There are a lot of people and industries watching these talks with hopeful anticipation. None may be more so than American agriculture.
The United States charged China with several violations of fair-trade practices back in 2018. These included forced technology transfers and stealing of technology. This led to the United States imposing tariffs on China and China retaliating in kind. We have heard the debates over whose tariffs are legal and whose aren’t, so we will skip those for now.
Agriculture is one of America’s chief exports. It is estimated that one of every three rows of American Crops is exported. China is a large purchaser of U.S. Soybeans and Pork. Well, at least they were. Since the trade war took hold, soybean and pork producers in the U.S. have taken it on the chin and have had to find new markets to export their goods. None of these markets can equal the loss of China’s imports.
When President’s Trump and Xi emerged from the G20 summit with a cease-fire, you could almost hear an audible sigh of relief. However, we still had many questions to be answered. The greatest of these is, “what now?” The United States imposed a deadline of March 1st to see progress in trade talks with China, or they would go forward with another round of tariff increases.
This January meeting could not have come too soon for American agriculture. The promise of more Chinese purchases of Ag products is one thing, but deliveries are another thing entirely. Soybean growers have faced a nearly 20 percent drop in soy prices since the threat of tariffs began last summer. American Soybean Association president Davie Stephens of Kentucky says: “We cannot withstand another six months,” noting farmers “need stability returned to the market.” With worries over the quality of the Brazilian crops, we may see more headway for U. S. Ag products. China traditionally buys much of its soybeans from Brazil during this time of the year. With the U.S. having a strong supply on hand, a trade resolution may be attractive to China. U.S. officials are optimistic these talks will go well. U.S. Commerce Secretary Wilbur Ross said he thought a reasonable agreement could be reached which China, “could live with.”
Meetings are set to wrap up during the middle of this week, and farmers are holding their collective breath.