New US-China trade war could reshape global agricultural markets
Tuesday's US presidential election could have major, long term impacts for Chinese agricultural commodities purchasing.
On Friday, Reuters reported that China has restructured its ag product imports to reduce reliance on the US for key crops. The US went from supplying:
- 40% of China's soybeans in 2016 to 18% this year (Reuters).
- 38% of China's corn in 2020 to 26% in 2023 (CAAS).
Brazil is one of the biggest beneficiaries, now supplying 76% of China's soybean imports.
- It is also the biggest supplier of corn, after gaining market access in 2022.
Per a study commissioned by US corn and soybean associations (NCGA):
- "The 2018 trade war created concerns about the reliability of US supply...[and] encouraged irreversible production area expansion in...competitor nations."
The study concluded that US corn and soybean farmers "could lose billions" in the event of "a new tariff-induced US-China trade war."
- But the Trump campaign is doubling down on a tariff-focused trade strategy, promising "hundreds of billions of dollars" in new tariffs (Reuters).
Get smart: The US election is certain to impact short-term spot and futures prices, no matter the outcome – but a second Trump administration could also deal long-term damage to US farmers.
The bigger picture: If you're wondering why US pollsters think the traditional Republican stronghold state of Iowa could flip for Harris, look no further than the state's corn and soybean growers.