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Trade negotiations continue

Trade negotiations continue

Soybean growers hopeful a resolution soon reached.

President Trump is extending the March 1 deadline for U.S. and Chinese negotiators to reach a trade pact before raising tariffs from 10% to 25% on $200 billion in trade goods.

“We are glad that talks between these two countries will continue without the tariff hike previously expected at the 90-day deadline later this week, but we need resolution and are discouraged that it’s still hard to see a tangible end in sight,” said Davie Stephens, a soybean grower from Clinton, Kentucky, and American Soybean Association president. Tariffs were first imposed on soybeans in July 2018, in response to tariffs imposed by the Trump administration on Chinese goods.

This is the second time Trump has extended the deadline for trade talks – the first deadline was Dec. 31. But this time he didn’t mention a new deadline nor did he specify what progress had been made, according to Forbes.

The Chinese government has recently announced and begun to make good on government-to-government commitments to purchase American soybeans totaling around 20 million metric tons (735 million bushels).

The value of U.S. soybean exports to China has grown exponentially the past 20 years, from $414 million in 1996 to $14 billion in 2017. China imported 31% of U.S. production in 2017, equal to 60% of total U.S exports and nearly one in every three rows of harvested beans. Over the next 10 years, Chinese demand for soybeans is expected to account for most of the growth in global soybean trade, making it a prime market for the U.S. and other countries.

As the trade war drags on, importers continue to pay the tariffs. They pass the tariffs on in higher prices to consumers. The Washington Post reports the U.S. tariff revenue received by the federal government has been funneled to farmers impacted by lower prices because China stopped buying U.S. soybeans, hogs, cotton and other ag products.

Trump announced the two sides have reached agreement on currency manipulation, but no specifics were released, according to Fox News.

Source: American Soybean Association, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
TAGS: Soybean
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