XENIA — U.S. soybean growers are expected to export more than 100 million tons of soybeans to China in the next year.
And much of the soybeans produced here in Ohio goes straight to ports in China.
Will that export market be threatened by the escalating trade war talk between Beijing and the Trump administration?
The U.S. is a major producer and exporter of soybeans globally, and China is the top buyer of these American oilseeds, Ohio State University international agriculture economist Ian Sheldon told farmers at a January “agriculture forecast” meeting in January held in Circleville.
At that meeting, Sheldon said, “We can never overestimate the importance of our trade with China, especially in terms of agriculture. Almost 20 percent of ag exports is to just China – our largest exporter.”
Sheldon is the Andersons Professor of International Trade at OSU.
Beijing could target soybeans to retaliate against any punitive trade action from the U.S., but it’s unlikely to do that just to counter heavy U.S. tariffs on steel and aluminum, experts said in a CNBC report Friday.
“Half of U.S. soybeans exports goes to China. If China hits back on soybeans, it’s really going to hurt,” said Haiyan Wang, a professor at INSEAD in Washington D.C.
In 2016, the U.S. exported about 1.3 billion bushels of soybeans to China, with about the same exported in 2017.
A trade war may not be the best move at this point, Wang told CNBC.
“It’s the question of a measured response,” said Hans Hendrischke, professor of Chinese business and management at the University of Sydney Business School.
China steel and aluminum products are just a small percentage of total U.S. imports.
So it’s unlikely that China will retaliate against what is a “fairly small type of sanction” against steel and aluminum imports with a broad counter-punch on American soybeans, Hendrischke said.
The world’s second largest economy is also unlikely to do that just yet as President Donald Trump’s announcement on the steel and aluminum tariffs does not target China alone, said Jake Parker, vice president of China operations at the U.S.-China Business Council.
But Beijing had previously indicated it will take action against the soybean and corn industries in retaliation for any U.S. tariffs on China.
On Friday, China’s commerce ministry proposed a list of 128 U.S. products as potential retaliation targets, according to a statement on its website.
The U.S. goods, which had an import value of $3 billion in 2017, include wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol, and ginseng, the ministry said. Those products could see a 15 percent duty, while a 25 percent tariff could be imposed on U.S. pork and recycled aluminium goods, according to the statement.