US soya farmers fear Chinese retaliation due to steel tariff
March 16, 2018
The US soyabean industry has voiced concerns that the Department of Commerce’s (USDC) suggested tariff on Chinese steel could lead to retaliatory measures on US soyabean exports.
The USDC released a number of recommendations on 16 February – a 53% tariff on steel among them – following its investigation into restricting certain foreign imports, wrote Platts on 22 February.
An anonymous source close to the matter told Platts that the situation had become a ‘what-if’ scenario and that the agricultural industry feared Chinese restrictions on US soyabean imports.
“It is a general concern that the current administration is playing a risky game that could greatly affect the agricultural market,” the source said.
John Heisdorffer, president of the American Soybean Association, agreed, saying that the tariffs would make life “very hard” for American soya farmers.
“Our capable competitors in Brazil and Argentina are all too happy to pick up whatever slack we leave in supplying the Chinese market,” said Heisdorffer.
China was a major destination for US soyabeans, having already bought 26.6M tonnes of soyabeans from the USA in the current marketing year, representing 59.6% of total US soya exports in the period, Platts said based on US Department of Agriculture (USDA) data.
In 2016/17, China took in 60.6% of US soyabeans, up from 56.9% in 2015/16.
The US agri industry was no stranger to restrictive actions from China. Earlier in February, China started an anti-dumping duty investigation on US sorghum and implemented a preliminary tariff in retaliation to American restriction on the imports of Chinese solar panels.
September 2016 also saw China slapping anti-dumping and anti-subsidy duties on US dried distillers grains (DDGS), which caused the Asian juggernaut’s imports to fall 84% from 2.3M tonnes in 2016 to 378,000 tonnes in 2017, bumping China down from being the number one US DDGS importer to eighth place.
In 2009, the previous President Barack Obama’s 35% tariff on Chinese car tyres were countered with penalties on US chicken parts, from which Richard Chriss, president of the trade group American Institute for International Steel, said the poultry industry had never recovered.