The American Soybean Association (ASA) on Monday expressed serious concerns that China will retaliate against their sector over President Trump’s steel and aluminum tariffs.
ASA President John Heisdorffer sent a letter to Trump urging him to either modify or reverse the tariffs of 25 percent on steel and 10 percent on aluminum, which he argues could severely damage the industry.
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“We believe this action could result in retaliation against exports of U.S. soybeans by other countries, and particularly China,” Heisdorffer said.
“We urge you to modify if not reverse your decision to avoid a trade war that could seriously undermine our industry, which is highly dependent on trade,” he wrote.
The group, whose board of directors will meet this week with lawmakers and Trump administration officials in Washington, asked the president for a meeting to discuss the issue.
During the past decade, China has become the largest customer of U.S. soybeans.
In 2017, China imported 1.4 billion bushels from the United States, 61 percent of total exports.
“The importance of the China market in sustaining our livelihoods and our industry’s role in the nation’s agricultural and rural economy cannot be overstated,” Heisdorffer wrote.
The president has made trade deficits a focus of his tariffs plan, arguing that the U.S. is getting short shrift on the global trading stage.
In response, Heisdorffer, who is an Iowa farmer, highlighted the significant contributions of soybeans to the nation’s trade balance.
“As an export-driven industry, we believe agriculture can make a powerful contribution to reducing the nation’s trade deficit if the administration pursues policies that enhance our competitiveness rather than reduce our access to foreign markets,” Heisdorffer added.
In 2017, U.S. farmers produced a record 4.4 billion bushels of soybeans and exported more 2.3 billion bushels, or 52 percent, valued at $27 billion.
“For the last 20 years, soybeans have contributed more to the U.S. trade balance than any other agricultural product,” he said.
Heisdorffer argued that any market share the U.S. loses to South American competitors such as Brazil can’t be made up with sales to other markets.
“In the case of soybeans, this argument fails to recognize that our largest competitor, Brazil, is continuing to expand soybean production on new lands,” Heisdorffer said.
“Brazil is already the world’s largest soybean exporter, including to China, and would respond quickly in the event U.S. trade actions trigger retaliation against our soybean exports.”