U.S. agricultural companies and trade war
The meeting of U.S. and Chinese officials took place in Shanghai several days ago. They gathered to talk about the trade war between the U.S. and China. Unfortunately, negotiations ended without any decision. U.S. President Donald Trump commented on the visit of U.S. delegation on his twitter. Trump showed his frustration by imposing additional sanctions on Chinese products. Consequently, the agricultural sector continues to suffer as trade war entered a new phase this summer.
China won’t import U.S. agricultural products
Trump’s decision to impose additional tariffs from September made the situation even more complicated. As a result, U.S. farmers might lose one of the biggest customers. Moreover, China decided to stop buying U.S. agricultural products. On Tuesday, China’s Commerce Ministry announced starting from August 6, Chinese companies won’t import agricultural products from the U.S.
This is a big problem for American farmers, who sell their products to Chinese companies. In 2018, the U.S. exported to China soybeans, dairy, pork, etc. Moreover, it is worth mentioning that the total value of the soft commodities exported to China was $9.1 billion. Nevertheless, the export of agricultural products fell by more than $10 billion in comparison with 2017.
Donald Trump blamed China and said China was not buying agricultural products in large quantities. This was one of several reasons why Trump decided to initiate a new round of sanctions. However, Chinese officials denied this information.
According to Cong Liang, China kept buying U.S. agricultural products. Chinese state media covered this topic and provided detailed information about the U.S. soybeans exports to China. They also interviewed Cong who said that two million tonnes of soybeans intended for China will leave the U.S. in August. He added that China was planning to buy additional 300,000 tonnes in September.
China used soybeans imported from Brazil and Argentina to decrease the dependence on U.S. imports.
It is hard to say whether China can completely get rid of soybeans imported from the U.S. Meanwhile, U.S. farmers might find it hard to regain their market share on the Chinese market.