China pivot from US farm imports bolsters it against trade war risks
Trade tensions loom with upcoming U.S. election
China diversifies farm imports to reduce dependency on U.S.
U.S. soybean exports to China down significantly from 2016
By Mei Mei Chu and Naveen Thukral
BEIJING/SINGAPORE, Nov 1 (Reuters) -China's push to shift its food import sources since 2018 has put it in a better position to impose tit-for-tat tariffs on U.S. farm goods with less harm to its food security if trade friction with Washington flares after the U.S. presidential election.
The threat of a trade war looms for China, the world's top importer of farm products such as soybeans and corn, with Republican candidate Donald Trump floating blanket 60% tariffs on Chinese goods in a bid to boost U.S. manufacturing.
His opponent Kamala Harris, a Democrat, is also expected to confront China on trade.
Since Trump was in the White House, China has slashed its dependence on U.S. farm goods in a concerted effort to beef up national security, including food self-sufficiency.
The pivot began in 2018, when Beijing slapped 25% tariffs on imports of U.S. soybeans, beef, pork, wheat, corn and sorghum, retaliating against duties imposed by the Trump administration on $300 billion worth of Chinese goods.
The move led to a reshaping of global agriculture trade flows, despite Trump and then-Chinese Vice Premier Liu signing a pact in January 2020 under which Beijing promised to boost purchases of U.S. goods and services, including farm products.
Instead, China has decreased U.S. purchases, buying more grain from Brazil, Argentina, Ukraine and Australia, even as it boosts domestic production.
"Beijing feels much safer knowing the U.S. has less leverage over China's food security in the event of a major conflict," said Even Pay, agriculture analyst at Beijing-based consultancy Trivium China.
"That reduction is by design," she said.
This year, the share of China's soybean imports from the U.S. has dropped to 18%, from 40% in 2016, while Brazil’s share has grown to 76% from 46%, according to Chinese customs data.
For corn, Brazil overtook the U.S. as China's top supplier in 2023, just one year after Beijing approved purchases from the South American agricultural powerhouse.
Meanwhile, Chinese livestock companies have been reducing use of soymeal in feed - a move to ease reliance on imported soybeans - while Beijing has approved genetically modified soybean and corn varieties to boost output.
China's agriculture ministry did not immediately respond to a request for comment.
A spokesperson for Trump did not directly comment on the drop in China's reliance on U.S. farm exports, but pointed to Trump's comments that tariff is "a beautiful word" and "we will take in hundreds of billions of dollars into our treasury and use that money to benefit the American citizens."
Harris' campaign website says the Democratic candidate "will not tolerate unfair trade practices from China or any competitor that undermines American workers".
STOCKING UP
In anticipation of post-election tensions, Chinese buyers have boosted agricultural imports, including American soybeans and corn, traders and analysts say.
Imports of soybeans, used mainly for animal feed, are up 8% in the first nine months of the year, with barley purchases increasing 63% and sorghum shipments climbing 86%.
"This time is different. China is well stocked up on most of its needs," said a trader at an international trading company in Singapore which sells grains and oilseeds to China and declined to be named as they were not authorised to speak with media.
"There won't be any supply shock immediately and it will give China time to plan and redirect purchases," he said.
U.S. soybean export premiums are at their highest in 14 months, as grain merchants race to ship a record harvest ahead of the election.
While Beijing would prefer to avoid targeting food staples in a tit-for-tat trade war, it may be forced to do so, said Wendong Zhang, an assistant professor and agricultural economist at Cornell University in Ithaca, New York.
"China's retaliation would be proportional in terms of trade value and with the goal to inflict economic and political cost, which tends to lead to retaliation on agricultural products."
China's overall trade surplus with the U.S. totalled $33.33 billion in September alone, limiting its options to retaliate.
"China ... can reduce its exposure to U.S. goods only to some extent. There are only limited places where you can get these products from," Dennis Voznesenski, an analyst at Commonwealth Bank of Australia.
US FARMERS VULNERABLE
Polls show Harris and Trump to be neck and neck, although Trump leads in most agricultural heartland states even though the last trade war was a blow to U.S. farmers and led Trump's administration to pay them about $23 billion in compensation, according to the Government Accountability Office.
About half of American soybeans, the top U.S. export to China, are shipped to the country, accounting for $15.2 billion of trade in 2023, according to the U.S. Census Bureau.
Soybean and corn prices are trading near four-year lows amid ample world supplies, fuelling worry among U.S. farmers.
"We are very concerned. We are not the only soybean producer in the world. South America is producing an awful lot of soybeans," said Mark Tuttle, a soybean farmer in northern Illinois. "If we were to institute more tariffs, that would be very detrimental to our situation."
China soybeans imports in metric tons https://reut.rs/3YACttZ
China agricultural imports in USD https://reut.rs/3YACqhN
US agricultural exports in USD. Trade value of exports to China remains stable but shipment volumes are declining. https://reut.rs/4hjmTu7
Reporting by Mei Mei Chu and Naveen Thukral; Additional reporting by Karl Plume in Chicago; Editing by Tony Munroe and Sonali Paul
නවතම පුවත්
වියාචනය: XM Group සමාගම් ක්රියාත්මක කිරීම පමණක් වන සේවා සපයන අතර වෙබ් අඩවියේ හෝ වෙබ් අඩවිය හරහා ලබා ගත හැකි අන්තර්ගතය බැලීමට සහ/හෝ භාවිත කිරීමට පුද්ගලයෙකුට ඉඩ සලසමින් අපගේ මාර්ගගත වෙළඳ පහසුකම වෙත ප්රවේශය ලබා දෙන අතර වෙනස් කිරීමට හෝ පුළුල් කිරීමට අදහස් නොකරයි. එවැනි ප්රවේශය සහ භාවිතය සෑම විටම (i) නියමයන් සහ කොන්දේසි, (ii) අවදානම් අනතුරු ඇඟවීම් සහ (iii) සම්පූර්ණ වියාචනයට යටත් වේ. එබැවින් එවැනි අන්තර්ගතයක් සාමාන්ය තොරතුරුවලට වඩා වැඩි යමක් සපයා නොමැත. විශේෂයෙන්ම, අපගේ මාර්ගගත වෙළඳ පහසුකමේ අන්තර්ගතය පෙළඹවීමක් හෝ මූල්ය වෙළඳපොළවල කිසිදු ගනුදෙනුවක් සිදු කිරීමට ඉදිරිපත් කිරීමක් නොවන බව කරුණාවෙන් සලකන්න. ඕනෑම මූල්ය වෙළඳපොළක වෙළඳාම් කිරීම ඔබේ ප්රාග්ධනයට සැලකිය යුතු අවදානමක් එක් කරයි.
අපගේ මාර්ගගත වෙළඳ පහසුකමේ ප්රකාශිත සියලු කරුණු අධ්යාපනික/තොරතුරුමය අරමුණු සඳහා පමණක් අදහස් කෙරෙන අතර මූල්ය, ආයෝජන බදු හෝ වෙළඳ උපදෙස් සහ නිර්දේශයන්; හෝ අපගේ වෙළඳ මිල පිළිබඳ වාර්තාවක්; හෝ ඕනෑම මූල්ය උපකරණයක ඉදිරිපත් කිරීමක් හෝ ඒ සඳහා පෙළඹවීමක්; හෝ විශේෂ ඉල්ලීමකින් තොරව ඔබ වෙත ලබා දෙන ලද මූල්ය ප්රවර්ධනයන් ලෙස නොසැලකිය යුතුය.
ඕනෑම තෙවන පාර්ශවීය අන්තර්ගතයක් මෙන්ම XM විසින් සකසන ලද අන්තර්ගතය එනම් අදහස්, පුවත්, පර්යේෂණ, විශ්ලේෂණ, මිල ගණන් සහ වෙනත් තොරතුරු හෝ මෙම වෙබ් අඩවියේ අන්තර්ගත තෙවන පාර්ශවීය වෙබ් අඩවි සඳහා සබැඳි සාමාන්ය වෙළඳපොළ විවරණයක් ලෙස "පවතින පරිදි" සපයා ඇති අතර එහි ආයෝජන උපදෙස් ඇතුළත් නොවේ. ඕනෑම අන්තර්ගතයක් ආයෝජන පර්යේෂණයක් ලෙස අර්ථ දක්වා ඇති ප්රමාණයට, ආයෝජන පර්යේෂණයේ ස්වාධීනත්වය ප්රවර්ධනය කිරීමට නිර්මාණය කර ඇති නෛතික අවශ්යතාවලට අනුකූලව අන්තර්ගතය සකසා නොමැති බවත් එලෙස අරමුණු කර නොමැති බවත් ඔබ සලකා පිළිගත යුතු අතර එබැවින් එය අදාළ නීති සහ රෙගුලාසි යටතේ අලෙවිකරණ සන්නිවේදනයක් ලෙස සලකනු ලැබේ. ඉහත සඳහන් තොරතුරු සලකා මෙතනින් ප්රවේශ විය හැකි, ස්වාධීන නොවන ආයෝජන පර්යේෂණ සහ අවදානම් අනතුරු ඇඟවීම පිළිබඳ අපගේ දැනුම්දීම ඔබ කියවා තේරුම් ගෙන ඇති බව සහතික කර ගන්න.
