In an effort to get fair trade for U.S. goods, the Trump administration made announcement last week to put tariffs on solar panels and washing machines from China as part of a campaign promise to get tough on trade.
While these 30 percent tariffs on goods aren’t going to impact agriculture directly, Chip Flory, host of AgriTalk and AgriTalk After the Bell, says the trading tiff between China and the U.S. could “ramp up” and soybeans could take a hit if something were to happen with metals like steel or aluminum.
“It’s something we need to keep a close eye on, and all the trade issues with the Trump administration,” he said on U.S. Farm Report.
This export issue goes beyond solar panels and washing machines. Pete Meyer of S&P Global Platts, said this issues stems from an intellectual property matter with the Chinese. He doesn’t think trading problems with steel and aluminum that could impact soybean shipments will be anything to worry about.
“China is still going to import 2.5 percent more beans than they did the previous year,” said Meyer. “They’re just going to get it from someplace else, and we believe that the price the board of trade is relevant to the total global balance sheet.”
Six rounds of NAFTA renegotiation talks aren’t enough to bring the two-decade old trade agreement into the 21st century, and nine days of talks are expected to begin in Mexico City on Feb. 26.
While there is a big difference between getting into a trade war with China and withdrawing from the North American Free Trade Agreement, Matt Bennett of Bennett Consulting thinks the former would be worse than the latter.
“If you want to see this downturn get even worse for U.S. agriculture, take China out of the equation buying our soybeans,” he said. “The Chinese are paying a little bit more for soybeans buying them off Brazil than what they are us. I don’t think they’re going to do that forever unless we continue to get into trade disputes with them.”
Hear why Flory says the lack of a “fear factor” is concerning and the full roundtable on U.S. Farm Report above.