The American Soybean Association (ASA) is expressing frustration about the escalation of a trade war with China. On Wednesday, China issued a $50 billion list of U.S. goods - including soybeans - for possible tariff hikes in an escalating dispute.
“We have been warning the administration and members of Congress that this would happen since the prospect for tariffs was raised,” said John Heisdorffer, ASA President and Iowa farmer. “That unfortunately doesn’t lend any comfort to the hundreds of thousands of soybean farmers who will be affected by these tariffs.”
China, the largest customer of U.S. soybeans, announced a proposed tariff of 25 percent on imported U.S. soybeans. According to ASA, China purchases 61 percent of total U.S. soybean exports, and more than 30 percent of overall U.S. soybean production.
“This is no longer a hypothetical, and a 25 percent tariff on U.S. soybeans into China will have a devastating effect on every soybean farmer in America,” Heisdorffer said.
The knee-jerk reaction in Chicago has been drastic, with soybean prices on the Chicago Mercantile Exchange dropping 50 cents overnight, and falling another 30 cents Wednesday morning.
China’s tax agency gave no date for the increase to take effect and said that will depend on what President Donald Trump does about U.S. plans to raise duties on a similar amount of Chinese goods.
“We call on President Trump to engage the Chinese in a constructive manner—not a punitive one—and achieve a positive result for soybean farmers,” said Heisdorffer.
Editor's note: Additional information from Associated Press