Farmers Pleased w/ Tariff Pause, Rate Drop; Now Look to China Negotiations

Soybean farmers across the U.S. were pleased to hear most countries will get a 90-day reprieve from the new individualized tariffs announced April 2-an opportunity for negotiations with our trading partners that could lead to consensus and potentially avoid permanent tariffs, along with improving market access for U.S. agriculture. With the pause came a rate drop to 10% for each of the countries itemized during that announcement-except for China.

The continued escalation of tariffs with China is concerning to soybean farmers, as China serves as a critical export market for U.S. soy. In another round of tariff tit-for-tat with the administration, China has responded to the most recent U.S. tariffs levied on China with a matching 50% tariff on all imports from the United States. These duties again apply to soybeans-in addition to the recent 34% tariff hike and previous 10% already in place from March. After including the "normal" VAT and standard duty rate for soy, the effective rate for soybeans shipped to China is 114.73%

Caleb Ragland, American Soybean Association president and Kentucky soybean farmer, said that's a tough pill to swallow considering China remains U.S. soy's greatest export market: "We run the risk of immediate impacts this growing season, along with the impacts a prolonged trade war with China will inflict on our industry once again. The short-term disruptions are painful, but the long-term repercussions to our reputation, our reliability as a supplier, and the stability of those trading relationships are hard to even put into words. We're still reeling from TW1-Trade War One-and are certainly not thrilled about an extended TW2.

We appreciate this pause-this opportunity for discussions that can bring resolution, but we ask the administration and China both to press pause with one another, as well, and pursue a Phase 2 trade agreement that will address U.S. trade concerns in a constructive way while preserving the markets we rely on," Ragland said.