Soybean farmers across the U.S. were pleased to hear most countries will get a 90-day reprieve from the new individualized tariffs announced April 2—an opportunity for negotiations with our trading partners that could lead to consensus and potentially avoid permanent tariffs, along with improving market access for U.S. agriculture. With the pause came a rate drop to 10% for each of the countries itemized during that announcement—except for China.
The continued escalation of tariffs with China is concerning to soybean farmers, as China serves as a critical export market for U.S. soy. In another round of tariff tit-for-tat with the administration, China has responded to the most recent U.S. tariffs levied on China with a matching 50% tariff on all imports from the United States. These duties again apply to soybeans—in addition to the recent 34% tariff hike and previous 10% already in place from March. After including the “normal” VAT and standard duty rate for soy, the effective rate for soybeans shipped to China is 114.73%
Caleb Ragland, American Soybean Association president and Kentucky soybean farmer, said that’s a tough pill to swallow considering China remains U.S. soy’s greatest export market: “We run the risk of immediate impacts this growing season, along with the impacts a prolonged trade war with China will inflict on our industry once again. The short-term disruptions are painful, but the long-term repercussions to our reputation, our reliability as a supplier, and the stability of those trading relationships are hard to even put into words. We’re still reeling from TW1—Trade War One—and are certainly not thrilled about an extended TW2.
We appreciate this pause—this opportunity for discussions that can bring resolution, but we ask the administration and China both to press pause with one another, as well, and pursue a Phase 2 trade agreement that will address U.S. trade concerns in a constructive way while preserving the markets we rely on,” Ragland said.
***Courtesy of the American Soybean Association***
