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ISA-Chinese officials talk trade, tariffs

Article cover photo
Hong Lei, consul general of the People’s Republic of China in Chicago talks with Dave Walton and Tim Bardole, both ISA directors, during a meeting in Ankeny. (Photo: Joseph L. Murphy/Iowa Soybean Association)

By Matthew Wilde, ISA senior writer


A Chicago-based Chinese diplomat traveled to Iowa this week to talk trade with soybean and state ag officials.

Hong Lei, consul general of The People’s Republic of China, met with Iowa Soybean Association (ISA) leaders Monday to discuss the ongoing trade dispute between his country and the United States. After the meeting, Lei met with Iowa Secretary of Agriculture Mike Naig at the Iowa State Fair.

Lei visited ISA in April and asked farmer-leaders and staff for help to avert a trade war between the world’s two largest economies. Now that the two countries are engaged in a tit-for-tat tariff battle that involves soybeans, he wanted to personally express to ISA officials the importance of a mutually-beneficial trade relationship built on mutual respect.

ISA representatives included Karey Claghorn, chief operating officer; Grant Kimberley, market development director; Tim Bardole, at-large director and secretary and Dave Walton, District 6 director.

“We made our position known that we want free trade between the nations, and have expressed that to the Trump administration,” Kimberley said. “But this issue is bigger than us.”

Lei requested his comments from Monday’s meeting not be publicized.

China imposed retaliatory 25-percent duties on U.S. products, including soy, after the U.S. slapped $34 billion worth of tariffs on high-tech goods from the country July 6. U.S. trade officials say the goal is to reduce the U.S. trade deficit with China by $200 billion and stop the country’s unfair trade practices, mostly theft of U.S. intellectual property and forced transfer of technology as a condition of doing business in China.

Last week, the Trump administration said it would impose a 25-percent tariff on an additional $16 billion worth of Chinese imports. China responded in-kind.

Trump has threatened to impose even more tariffs on Chinese goods worth hundreds of billions of dollars if the nation doesn’t agree to U.S. demands.

Lei previously said China doesn’t want a trade war but is “forced” to retaliate against unfair trade actions of the United States. He contends China has made improvements to protect intellectual property but admitted more work is needed.

Media reports indicate negotiations have occurred recently between the nations, but no progress has been made. U.S. government officials previously hinted trade issues could take years to resolve.

Valued customer

Claghorn told Lei that soybean farmers have cultivated friendships and business in China for more than 35 years and still consider the nation a valued customer. Iowans want issues resolved to resume trade as normal, she said, but it will likely take Presidents Donald Trump and Xi Jinping to work out differences themselves.

“It was clear the consul general was here to deliver a message that the governments need to continue to talk and that China has made improvements pertaining to intellectual property,” Claghorn said. “We recognize challenges need to be resolved on that front. We agree negotiations need to resume and the presidents will likely need to talk and find common ground.”

Lei said the decades-old friendship between Iowa and its soybean farmers has been beneficial and he hopes it will grow, spurring more trade in the future.

“We sincerely hope our friends at ISA will make a strong effort to ward off the severe consequences that would come from a trade war,” Lei said in April.

The U.S. exported nearly 1.4 billion bushels of soybeans to China last year — about 40 percent of its needs — valued at $12.4 billion, according to U.S. Department of Agriculture data.

U.S. soybean exports to China initially stopped after tariffs went into effect. Soybean prices plummeted by about $2 per bushel since the trade dispute began.

However, recent media reports indicate China has started to buy U.S. soybeans again despite the 25-percent tariff.

Reuters reported a ship, the Peak Pegasus, unloaded nearly 2.6 million bushels of U.S. soybeans this week worth about $23 million at the Chinese port of Dalian. The ship raced across the Pacific to beat the tariff deadline but just missed it and has been anchored at the port ever since. State-owned Sinograin purchased the beans. The extra duty equates to about $6 million.

Based on projected demand and South American production, oilseed analyst John Baize estimates China will have to buy 550 to 730 million bushels of U.S. soybeans during the 2018-19 marketing year despite added costs due to tariffs.

Big harvest on the horizon

ISA District 6 Director Dave Walton of Wilton said he’ll likely be combining soybeans in about six weeks. He expressed to Lei the need to resolve the trade dispute, so farmers and Chinese buyers benefit financially. Otherwise, both sides lose.

“They want to continue to trade with us, but they feel they have to protect their own interests,” Walton said. “Every week this drags on, the anxiety increases.”

The USDA last week sharply increased soybean production estimates. The nation’s crop is forecast at nearly 4.6 billion bushels, up 276 million from last month. The first survey-based yield forecast is 51.6 bushels per acre, 3.1 bushels above last month and 2.5 bushels better than last year.

Iowa’s soybean production is pegged at more than 580.5 million bushels, nearly 20 million more than 2017. The average yield is projected at 59 bushels per acre, 2.5 bushels better than last year.

“The closer we get to harvest, the tougher it gets,” Bardole said during the meeting with Lei. “The tariffs are hurting everyone, and I’m sure it’s a challenge in China as well. It’s in all our best interest to resolve the dispute sooner rather than later.”

Contact Matthew Wilde at

For media inquiries, please contact Katie Johnson, ISA Public Relations Manager at or Aaron Putze, ISA Communications Director at

For permission to republish articles or to request high-res photos contact Aaron Putze at Iowa Soybean Association | 1255 SW Prairie Trail Pkwy | Ankeny | IA | 50023 | US

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