Being in the right place at the right time to gain insight from your customers on a controversial concern is helpful. An Iowa Soybean Association trade team delegation was in China for a week in March on a market development visit when President Donald Trump announced U.S. intentions to impose up to $60 billion in tariffs and trade sanctions against China.

ISA President Bill Shipley, with the team in China, immediately thought, “We don’t want the U.S. to get into a trade war.” The exchange of tariff threats between the two countries jeopardizes more than three decades of market development efforts to establish relationships with soybean processors, buyers and traders.

Need to grow market, not lose it
“No winners emerge from a trade war, particularly when it involves food and nutrition,” says Shipley, who farms near Nodaway in southwest Iowa. “It was very clear from our conversations that week in China that our most important customer of U.S. soybeans doesn’t desire a trade war. The people there just want to do business. So do Iowa and U.S. farmers, particularly as we go to the fields and plant what could be a record number of acres this spring.”

To say China matters to U.S. soybean farmers would be an understatement. With a population of more than 1.4 billion, China imports 62% of global soybean production. Nearly 40% of China’s soybean imports originate in the U.S. and are valued at almost $14 billion.

That said, soybean farmers recognize there are legitimate trade issues that must be resolved between the two countries, Shipley says. Those issues include intellectual property rights and requirements placed on U.S. companies wanting to do business in China. The ag industry acknowledges the importance of these matters and encourages their swift resolution.

“We believe this can be done absent targeting food and agricultural trade,” Shipley says. “Exports of U.S. soybeans, beef, pork and other commodities provide an ag trade surplus for our country. Encouraging more trade is advantageous for both nations. Agricultural trade boosts jobs and economic activity in America while reducing the overall trade imbalance existing between China and the U.S.”

Tariffs add to uncertainty
China’s proposal to add tariffs on soybeans and other U.S. ag exports adds to the uncertainty U.S. farmers face to do business in China, says ISA Vice President Lindsay Greiner, a farmer from Keota in southeast Iowa and a member of the trade mission. Trade wars are a lose-lose deal, he says. Iowa farmers would be negatively impacted by higher input costs and lower market prices. Chinese consumers would lose a reliable supplier and pay more for soybeans, due to reduced competition.

ISA and other farm organizations are urging U.S. and Chinese officials to pivot from politics and posturing and resolve this escalating trade dispute “for the benefit of American farmers and our Chinese customers,” says Greiner. “It’s important we keep delivering that message. Trade with China is vital, not only to the hundreds of thousands of U.S. soybean producers, but to the rural economies and communities that depend on these exports.”