Why Soybeans Matter
Understanding the role soybeans play in U.S.-Chinese relations
Since the trade war started, soybeans have made a lot of headlines. I’m guessing you don’t care about soybeans and you might even be wondering why this is such a big topic for U.S.-Chinese relations. Here’s a quick crash course.
According to the United States Department of Agriculture, China last year imported 31.7 million tonnes of U.S. soybeans, nearly 60 percent of U.S. export shipments, in deals valued at $12.25 billion. China is the world’s largest importer of soybeans, importing nearly 100% of its soybean needs. China has a growing animal agriculture industry, specifically pork, and they need soybeans to feed their hogs. The relationship works well, the United States grows a lot of soybeans and China eats a lot of them.
Tariffs
When the trade war started, it was obvious that Beijing was going to place additional tariffs on U.S. soybeans in response to U.S. tariffs on Chinese goods. An import tax on U.S. soybeans makes it harder for Chinese farmers to buy U.S. soybeans. Instead, farmers would buy Brazilian and Argentine soybeans because comparatively, they are cheaper. This hurts U.S. soybean growers because they can’t sell their soybeans and they have to pay to store their soybeans until someone wants them, generally…
