As the trade war between the US and China progress, an estimated $1.9 billion will be lost in farm exports. The Department of Agriculture analyses the subsequent problems that may further damage the overall income of agricultural exports in the country including the rise of potential other soybean competitors or exporters to China, more tariffs, and bankruptcies.
US Department of Agriculture chief secretary Robert Johansson said during the USDA Outlook Forum in Washington that exports in soybean products have experienced that most backlash from President Donald Trump’s trade war with China. He added that the exports in soybean products are expected to have “plummeted by 22 million metric tons, or over 90 percent” as a result. Johansson noted that China is one of the top five largest markets for farm exports of the US, but China was at the top of the list last 2017. This year’s sales on farm exports have reached only 6 percent as opposed to 18 percent during 2014. An estimated net income of $66 billion in the agricultural sector was projected for 2018 which was unlike the net income of $134 billion last 2013.
President Donald Trump referred to the farm exporters as “great patriots” after assuring the American nation that “they understand that they’re doing this for the country.” The farmer would understand the backlash of his trade war with China, he added. The Farm Bureau, which serves as the representatives of American farmers, detested both the trade war and tariffs and has allocated $12 billion for farmers who were severely affected by the trade war.
Between the lines, Russian agricultural exports have been taking advantage of the growing trade conflict. According to The Wall Street Journal, Russia’s exports on soybean in China have increased twofold. The country gained an overall income of 27 percent or over $100 billion in exports last 2018. Furthermore, Russian President Vladimir Putin and Chinese President Xi Jinping have a growing relationship and are starting to build a mutual understanding as the trade war with US President Donald Trump continues. Midwestern agriculture or farms have also experienced an increasing number of bankruptcies in a decade in connection with the trade war, the Journal added.
China is still developing new trade options and strengthening relationships with other commercial exporters across the globe as a way of alleviating the country’s economy and balancing out its potential losses in trade with the US. Although, a deal between the two countries after the trade war may increase the income of farm exports in the US. Johansson added that unsold soybean exports might take years to straighten out again. He also commented on South American exports in soy, saying it “would make exports more competitive in the rest of the marketing year, dimming the prospects for an export recovery.”