Illinois’ agriculture community is cautiously optimistic about a 90-day trade war cease fire that U.S. President Donald Trump and his Chinese counterpart revealed over the weekend.
Shortly after the U.S.-Mexico-Canada Agreement was signed by the leaders of those three countries at the G-20 summit in Buenos Aires, Trump’s administration said it won’t impose new tariffs on Chinese goods. That came after a summit meeting between Trump and Chinese President Xi Jinping.
“My meeting in Argentina with President Xi of China was an extraordinary one,” Trump said Monday morning on Twitter. “Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!”
Illinois Farm Bureau Senior Director of Commodities Tamara Nelsen said the cease fire is a positive development, but the agriculture community is still holding its breath.
“We’re still nervous,” Nelsen said. “The markets, I think, are reflecting that. They went up some for corn and soybeans, but they did not go up a lot.”
Nelsen said she doesn’t think all of the trade disputes between the U.S. and China can be solved in the next three months.
“But if we can make some advancement in a few key areas, sort of how the [USMCA] agreement got started, I think we can certainly work longer term to move forward together.”
Illinois Soybean Association Director of Strategic Market Development Mark Albertson said the cease fire didn’t take away 25 percent retaliatory tariffs China imposed on soybeans when the U.S. taxed steel and aluminum imports.
“Altogether we have a lot of duties going to China and this 25 percent new tariff is really what’s killing us,” Albertson said.
China imports more soybeans than all the other countries in the world, Albertson said, and if Illinois were a stand-alone country it’d be the fourth largest exporter of soybeans. That’s how important it is to Illinois soybean farmers, he said.
“Farmers will be a a [sic] very BIG and FAST beneficiary of our deal with China,” Trump said on Twitter morning. “They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants. Farmers, I LOVE YOU!”
Albertson said producers are cautiously optimistic because they’ve have seen this before, just last May.
“We were told the trade war was put on hold, the Chinese will start buying a lot of soy and other ag products and that didn’t happen,” Albertson said. “Within about a couple of weeks the trade war actually escalated. So it seems like every time we get good news, we end up worse off.”
Trump tweeted May 21 that “China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products – would be one of the best things to happen to our farmers in many years!”
Eight days later, the White House put out a statement about years of unfair trade practices China has engaged in, “including dumping, discriminatory non-tariff barriers, forced technology transfer, over capacity, and industrial subsidies — that champion Chinese firms and make it impossible for many United States firms to compete on a level playing field.”
The May 29 White House statement announced additional tariffs.
After the most recent ceasefire pronouncements, Albertson said Monday that producers holding out for higher prices can’t store their beans much longer.