American Soybeans, Beef, Sorghum, Wheat and More All Targeted for 25 Percent Tariffs by ChinaWed, 04 Apr 2018 05:44:42 CDT
Most U.S. Ag products that are exported to China may soon have a twenty five percent levy added to their imported prices- as farmers and ranchers are now sitting right in the middle- fully exposed- between two economic heavyweights as they are charging full speed towards a very nasty trade war.
On Tuesday- as part of the U.S. response to China’s unfair trade practices related to the forced transfer of U.S. technology and intellectual property, the Office of the U.S. Trade Representative (USTR) published a proposed list of products imported from China that could be subject to additional tariffs. (Click here for the complete story)
Following USTR’s Section 301 investigation, President Trump announced in March that the United States will impose tariffs on approximately $50 billion worth of Chinese imports and take other actions in response to China’s policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises. These policies bolster China’s stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as “Made in China 2025.”
Immdiately, the coalition Farmers for Free Trade expressed fears of what might happen. Former Senator Max Baucus, Co-Chair of Farmers for the coalition, released the following statement on the Section 301 tariff announcement.
“Farmers are going to get squeezed by this decision from all sides. First, the tariffs the U.S. announced today will make the ag equipment and inputs they rely on more expensive. Then they’ll face new tariffs on their exports when China retaliates. And as we saw yesterday, China is more than willing to target American farmers with retaliatory tariffs on our ag exports which will hurt farmers, main street businesses and consumers. As U.S. Trade Representative Robert Lighthizer has said on trade retaliation: “farmers get the short end of the stick.
"American farmers are watching this daily trade escalation closely, and they are worried. With ag incomes already slumping in the U.S., new tariffs could mean real trouble for the entire ag supply chain. We continue to urge the Administration to listen to farmers across rural America who can’t afford new taxes on their exports. Farm country is calling for an end to this trade war. We hope the administration will listen.”
Early this morning- the Chinese fired back. And soybeans are their headliner in that they plan on adding a 25% duty on the oilseed and its products.
The Asian nation plans to impose 25 percent duties on a slew of U.S. agricultural commodities such as soybeans, wheat, corn, cotton, sorghum, tobacco and beef, according to the Ministry of Commerce in Beijing. They are among 106 U.S. products targeted ranging from automobiles to chemicals and aircraft.
China is the world’s largest soybean importer and biggest buyer of the oilseed from the U.S. with trade worth about $14 billion last year. The Asian nation’s purchases have climbed to a record as expansion in large-scale livestock farming and a shortage of protein-rich feed grains boost soymeal consumption.
Accordng to a report from Bloomberg- “China’s response carries both economic and political weight as agricultural states are major supporting regions for Trump,” said Monica Tu, an analyst at Shanghai JC Intelligence Co. “The tariffs on U.S. imports including soybeans is China’s response that matches the scale of proposed U.S. tariffs.”
And analysts contacted by Bloomberg speculate that Brazilian farmers may be the winner in this latest round- as they are the country that could come closest to supplying China with soybeans if the US product is priced too high because of the tariffs.
Earlier- we featured comments from Kent Bacus of the National Cattlemen's Beef Association on his group watching the battle closely- hoping beef would not be targeted. Now, with this latest announcement- it is.
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