Mar 27, 2019
The American Soybean Association (ASA) is not pleased with recent comments from President Trump that he could leave tariffs in place under an agreement with China. ASA has always considered the lifting of the Section 301 tariffs by the U.S. in exchange for China removing its retaliatory 25 percent tariff on U.S. soybean imports as essential to any initial agreement between the two countries.
Davie Stephens, president of ASA and a soybean grower from Clinton, Kentucky, said, “The President’s statement that the tariffs should remain in place to ensure China’s compliance with the terms of a deal, rather than being rescinded as a part of that deal, is confounding. If reciprocal tariffs have generated current pressure to reach an agreement, why wouldn’t removing the tariffs and relieving that pressure be a necessary part of any initial deal? How can the U.S. and China reach any deal without doing so?”
Stephens continued, “We do understand the President’s concern regarding enforcement of other provisions of a deal, given China’s past record of walking back its commitments. And we would understand why the President would want to include a “snap back” mechanism to re-impose tariffs in the event other parts of any agreement were not honored, but we are tired of being collateral damage in this ongoing trade war and suffering because of these tariffs.”
ASA has gone on record in prior statements that it is has not been enough for China to make one-off “good will” purchases of U.S. soy over the last three months. Any longer-term plan to “manage” soybean trade under which China would guarantee to buy specified amounts of soybeans over an extended period of months or years—but still keep its 25 percent tariff in place—is not an acceptable alternative to full market access.
Soybean farmers continue to suffer from restricted access to China, by far the industry’s most important foreign customer. With depressed prices and unsold stocks forecast to double before the 2019 harvest begins in September, producers need China reopened to U.S. soybean exports within weeks, not months or even longer.
Any agreement reached between the U.S. and China that does not include removal of China’s 25 percent tariff on U.S. soybeans would not be acceptable to American soybean farmers. Bypassing elimination of China’s soybean tariff should not be on the table.