America exports a major portion of its soybean production to China. But, US-China trade war has gravely affected the export as China stopped the soybean import from the US. China is the world’s largest soybean importer, and the imports have been record high in July, according to the country. Currently, the country is importing the legume from Brazil as an alternative to the US because of the US-China trade conflict. This fall in export is directly affecting the US farmers’ market share, and they are showing their remorse to the Donald Trump Government.
Adding to this, the Midwest is on the verge of drought and arid summer weather. The scorching heat is drying the crop and making it worse as compared to the same time in the past years. All of these factors are affecting US farmers’ revenue. This situation is a reflection of the collateral damage of the US-China trade war, which is causing a redirection of demand and supply. In July 2019, China’s total imports reduced to a value of 5.6% which wasn’t expected at all, and total exports unexpectedly increased to 3.3%. While the exports to the US reduced by 7%, countries such as South Africa, Taiwan, and Brazil increased imports for china in double digits compensating for this deficit.
The tally of last months trade war was a trade surplus of 45.1 billion USD in favor of China. This value is similar to that it posted two years ago before the US tarrifs and the retaliation from China. The current situation depicts that the Chinese government won’t stop boycotting US’ agricultural products anytime soon. Trump further threatens to increase the tarrifs by 10% on 300 billion USD Chinese imports on an existing 25% extra tarrif on 250 billion USD. These highly taxed imported products will create a difficult situation for many. First of September is the deadline for this which is a day before labor day when the farmers from Ohio to Iowa turn up their harvests.
