China remains biggest export market and biggest troublemaker

President Donald J. Trump and Chinese President Xi met in November 2017, but trade relations deteriorated with the implementation of tariffs after trade negotiations broke down. (Official White House photo by Shealah Craighead)

Talk about mixed messages.

Two homemade campaign signs from last fall’s presidential election remain at the edge of a sprawling, well-maintained dairy farm that I recently passed.

One, large and white on a green background of tasseled corn, boasts former President Donald Trump; the other, smaller and more wordy, states that if Biden wins, all Americans will soon “work for China.”

Across much of the United States, many American farmers – maybe even most – are already working for China and, more ironically, they got there thanks to Trump, not President Joe Biden.

Perhaps more upside down, at least according to the logic contained in the Wisconsin signs, Biden does not seem in a rush to reverse Trump’s trade policies that continue to deliver massive sales of American agriculture to China. In fact, trade with China was just one of two geopolitical topics that the 2020 presidential enemies agreed to.


How did we get to this first mash-up? Let’s review.

In the 2016 presidential race, Trump threatened a tariff fight with China and, after his election, acted quickly to keep his word. Then, for nearly two years thereafter, if China did – washing machines, steel, aluminum, solar panels – Trump imposed a tariff on them.

The Chinese retaliated by hitting major U.S. agricultural exports like soybeans, pork and beef with their own tariffs. The fight quickly became costly, and Trump’s White House used the US Department of Agriculture’s $ 30 billion Commodity Credit Corporation line of credit to reimburse American farmers for sales to the United States. export lost.

Talking – and a tariff war – isn’t cheap, is it?

After trading cold looks and big losses, negotiators ironed out a partial truce in 2020, and U.S. agricultural exports to China began to rise. However, many other Trump-era tariffs have remained, and to this day continue to slash American manufacturers who incongruously believed that a Biden presidency would restore duty-free markets with China.

The increase in U.S. agricultural exports to China, however, coincided with two landmark events there – a widespread outbreak of African swine fever that decimated the country’s sow herd to reduce retail meat supplies and the rapid and deadly rise of the Covid-19 pandemic. Both strokes meant that China – trade war or not – needed shipments of food grown in the United States.

This request remains. In late May, the USDA predicted that agricultural exports to China “would hit a record high of $ 35 billion in fiscal year 2021 … eclipsing the previous record of $ 29.6 billion in fiscal year 2014” . Equally impressive, the new forecast was $ 3.5 billion higher than the optimistic February forecast.

Globally, U.S. agricultural exports are expected to reach around $ 164 billion from October 1, 2020 through September. 30, fiscal year 2021. That means China will buy 21% of all US agricultural exports to “remain the largest market for US agricultural exports” this year, “followed by Canada and Mexico.”

As such, does an American farmer or rancher still think they are not working – at least part-time – for China?

Specifically, how come Biden is a sale to China as he continues to maintain $ 350 billion in non-farm tariffs imposed by Trump that infuriates big American corporations?

The honest truth is that the Biden administration’s swift adoption of Trump’s tariff policy – as good as it is for American agriculture and bad for other American industries – gives the White House what it now needs with China: leverage to challenge China’s rise to economic and military power at the negotiating table rather than on a cyber or military battlefield.

So don’t expect White House Biden officials to reverse Trump’s trade stance anytime soon. It delivers exactly what they want and, more importantly, exactly what almost every American farmer wants.

And, yes, those are higher exports, higher profits and, you guessed it, jobs.


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