U.S. soybean export sales to China have come to a halt, the chief executive of a major agricultural merchant said on Wednesday, over mounting trade tensions between the world’s top two economies.
And Iowa’s senior U.S. Senator has branded that move “devastating.”
“All the business that’s being conducted with China now is being conducted from non-U. S. origins,” said Soren Schroder, CEO of White Plains, N.Y.-based Bunge Ltd. “That means Brazil first, but also places like Canada. Nobody’s willing to take the risk of committing to U.S. soybeans to China in the current context.”
Beijing has threatened tariffs on imports of U.S. products including soybeans, America’s top agricultural export to China, worth more than $12 billion.
“China is the largest consumer of U.S. soybeans, buying up nearly 60 percent of our soybean exports,” Sen. Chuck Grassley, R-Iowa, said in a statement Thursday afternoon. “If that market closes, it could be devastating for local communities across the Midwest.
“It’s also important to remember that when trade barriers go up, alternative sources of goods are found, and new trading relationships develop. A temporary setback could quickly develop into a permanent loss.”
Grassley is a senior member of the Senate Agriculture Committee and a senior member and former chairman of the Senate Finance Committee, which has jurisdiction over trade policy.
“Soybean farmers are my neighbors. Iowans who farm soybeans and other agricultural products form the backbone of Iowa’s economy. Soybean prices are low, and farmers are barely making ends meet.”
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He added that the United States “must stand up to China’s unfair practices. But as I’ve said before, if the federal government takes action on trade that directly results in economic hardship for certain Americans, it has a responsibility to help those Americans and mitigate the damage it caused.
“In the short-term, the Administration should be prepared to take action to help farmers if they are harmed by price collapses related to retaliation. In the longer-term, the Administration should help find alternative foreign markets.”
The United States and China began trade talks in Beijing on Thursday, with President Donald Trump maintaining his threat to press ahead with punitive tariffs on Chinese goods, trade experts say.
A breakthrough deal to fundamentally change China’s economic policies is viewed as highly unlikely, though a package of short-term Chinese measures could delay a U.S. tariff decision.
The discussions, led by U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He, are expected to cover a wide range of U.S. complaints about China’s trade practices, from allegations of forced technology transfers to state subsidies for technology development.
“This is going to be a series of relatively brief meetings with little pre-meeting planning on either side,” said Scott Kennedy, head of China studies at the Center for Strategic and International Studies in Washington, D.C.