25% Import Tariff Will Affect U.S. Planting Structure, Change Global Trade Pattern

By CnAgri2018-05-16 10:14:48 Print Soybeans strongly supports the agriculture of the U.S. According to the relevant report: if China imposes 25% tariff on the U.S. soybeans, the U.S soybean exports to China would decline 65%, the total U.S. soybean exports will decline 37%, the total soybean output will reduce 15%, the U.S. soybean producer price will drop 2.6%-5.2%, the U.S. economy may suffer a loss of US$17-33 billion each year.
 
After the event, the United States has also made efforts to find effective solutions.
A. The United States hopes that Europe will take over the reduced share of soybean imports of China. But we believe that even if EU transfers all of its import demand to the United States, there are still 19 million tons of unsalable soybeans in the United States.
EU needs to import about 14 million tons of soybeans per year mainly from the United States and Brazil. If we suppose that EU transfers all of its soybean import demand to the United States, China would act in response and transfer all its import demand to Brazil. As a result, the United States would witness around 19 million tons of unsalable soybeans.
 
B. The soybeans can be sold at a reduced price to partly offset the import costs of soybeans increased by the tariff.
The U.S. government could reduce the export prices of soybeans by subsidizing soybean farmers and offsetting duty costs, but it would need more than US$3 billion.
Whether the United States sells soybeans at a low price to new buyers or subsidize farmers so as to lower the price, it will bring huge economic losses and financial burdens to the U.S.
We are saying at some level, the current U.S. agriculture planting structure has been formed mainly by the demand from China, if Sino-US soybean trade has changed so much, it is bound to affect the U.S. planting structure which will break the relative balance of the current global agricultural products, creating a chain reaction in the world.