Iowa Soybean Association Statement on China announcement of tariffs on U.S. soybeans courtesy of Chief Executive Officer Kirk Leeds:
China’s proposed 25 percent tariff on U.S. soybean imports was anticipated by the industry. The country is very politically astute and had promised to respond in-kind to tariffs announced by the White House. China has followed through on that promise.
Trade issues between China and the U.S. are not new. Iowa soybean farmers understand there are legitimate issues needing resolution, particularly those involving intellectual property rights. We appreciate the importance of these matters and encourage additional dialogue between the two countries to resolve them.
It’s important to note that the announced tariffs on U.S. soybeans have not been imposed; they are targets.
That said, China’s proposed tariff on U.S. soybean imports is disconcerting for Iowa farmers poised to plant this year’s crop. Short term, the volley of proposed tariffs between the countries will negatively impact soybean prices. Long-term, an ongoing trade dispute with China risks stoking anti-Americanism sentiment that could jeopardize the strength of trade relations between the two countries – relationships that have taken U.S. soybean farmers nearly 35 years to develop.
China is a significant player in the global soybean market. The country consumes nearly 62 percent of all soybean exports. Approximately 33 percent of total U.S. soybean production is destined for China, fulfilling almost 40 percent of China’s total soybean imports. Therefore, both stand to lose if this trade dispute escalates.
A study recently conducted by Purdue University on behalf of U.S. soybean farmers finds that a 30 percent tariff on U.S. soybeans could result in a 71 percent reduction in soybean exports from the United States to China. Total U.S. soybean production would decline by 17 percent. The study also indicates reductions of:
• U.S. producer soybean prices by 5.2 percent
• U.S. economic welfare by $3.3 billion
• Chinese economic welfare by $2.6 to $8.4 billion
China needs U.S. soybeans. The U.S. soybean farmer needs China. It is our hope that U.S. and Chinese officials will quickly transition from politics and posturing to resolving this escalating trade dispute for the benefit of American farmers and our Chinese customers.
The Iowa Soybean Association (www.iasoybeans.com) develops policies and programs that help Iowa’s more than 40,000 soybean farmers expand profit opportunities while promoting environmentally sensitive production using the soybean checkoff and other resources. The association was founded in 1964 and is governed by an elected volunteer board of 22 farmers. It strives to be honest and transparent, fact-based and data driven and committed to environmental stewardship, collaborations and partnerships.