WASHINGTON – A new threat from the United States to impose a 25 percent tariff on goods from China that contain “industrially significant technologies” has China promising to enact its list of retaliatory tariffs on various US products, including a 25 percent tariff on soybeans.
President Donald Trump announced the latest tariffs on June 14, and Chinese officials were quick to respond that it would impose trade barriers of the “same scale and the same strength.”
China’s Commerce Department announced several months ago that it would impose retaliatory tariffs on 106 US goods amounting to roughly $50 billion in imports. That included the 25 percent tariff on soybeans, which could be devastating to growers who exported $14 billion of the commodity to China last year, said the American Soybean Association (ASA).
“Crop prices have dropped 40 percent in just the last five years, and farm income is down 50 percent compared to 2013,” said Davie Stephens, a Kentucky soybean grower and vice-president of the ASA. “A recent study by Purdue University economists predicts that soybean exports to China could drop by a whopping 65 percent if China imposes a 25 percent tariff on US soybeans. As a soy grower, I depend on trade with China – China imports roughly 60 percent of total US soybean exports, representing nearly 1 in 3 rows of harvested soybeans.”
Trump said the United States would pursue additional tariffs if China engages in retaliatory measures.
He said the US tariffs are essential to preventing unfair transfers of American technology and intellectual property to China.
“In addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China,” according to a White House statement.
The Chinese government said the tariffs were damaging relations and China’s offer to buy up to $70 billion of additional American products was invalid.
The ASA said soybeans are one of a number of crops that could see steep and lasting effects if China retaliates against US tariffs.
“America’s wheat farmers are experiencing continued drought, historically low commodity prices, and trade uncertainty,” said Jimmie Musick, president of the National Association of Wheat Growers and a wheat farmer from Sentinel, Oklahoma. “Adding a 25 percent tariff on exports to China for US wheat is the last thing we need during some of the worst economic times in farm country.”
Echoing those concerns are members of National Corn Growers Association (NCGA).
“Farmers are busy in the fields and need to be able to count on markets for their crops when it comes harvest time,” said Kevin Skunes, president of the NCGA. “They cannot afford the immediate pain of retaliation nor the longer-term erosion of long-standing market access and economic partnerships with some of our closest friends and allies.”
Grower and industry groups are asking the US Congress to convince the administration to halt tariffs and go back to the negotiating table.
Under the hashtag #TradeNotTariffs, members of these organizations are also raising awareness on social media.