April 2, 2018
China cutdown in US soybean imports could be flash point in US-China trade war
China could strike back against the US where it hurts most in the agricultural sector, soybeans, in a trade war.
According to a report by The Telegraph, economists are watching to see if China suddenly ramps up domestic production of soya beans, since such a move could indicate that the country is planning to pursue a heightened trade war with the US.
Data from the US Department of Agriculture showed that soybean was the top agricultural export earner for the US in 2017. Export value last year totalled $21.6 billion, with corn trailing far behind with $9.1 billion.
And China is the No. 1 buyer of US soybeans. Its imports of US soya beans are greater than the entire exports of non-US producers. The US Soybean Export Council (USSEC) said last year that China buys more than 60% of all US soybeans exported worldwide.
The Telegraph report said a decision to abandon US imports would leave a significant shortfall for Chinese consumption that would need to be filled by domestic producers.
In the first two months this year, the share of China's imported soya beans in total US exports was "unusually low", the report said.
It added that Chinese government subsidies for production have already shifted from corn to soya bean.
Tit for tat
US President Donald Trump has announced $60-billion tariffs on Chinese goods, and China retaliated, announcing that tariffs on 128 kinds of US imports, including pork, would be imposed effective Monday, April 2. Soybeans haven't been included so far on the list.
US Ambassador Terry Branstad has warned China about the consequences of trade sanctions on US soybeans, telling Bloomberg Television that any attempts to cut down on US soybean imports would hurt Chinese consumers more than it would American farmers.
The crop provides a key source of protein, including as feed for hogs. Back in July last year, the USSEC was reported as saying that China prefers US soy as evidenced by the purchase of more than US$5 billion worth of the grain during that month.
USSEC said China's preference for US soy stemmed from its exceptional composition and consistent supply, among others.