PEORIA, Ill. — Tensions are calming between the U.S. and China.
Phase one of the trade deal has been signed meaning existing U.S. tariffs on Chinese imports have been cut in half and the U.S. has dropped plans to impose tariffs on additional imports.
Before the trade war, Peoria County Farm Bureau Manager Patrick Kirchhofer says the United States’ number one export of soybeans was China.
But since tensions rose between the two trade giants, the U.S. had to find different sources to fill the void.
“Whenever we lost our China market, that really hampered Illinois and U.S. soybean producers and hopefully we can gain a lot of that market back in the next few months,” Kirchhofer said.
“Whenever the trade war did hit in 2018 we did expand on some other markets. Thailand, the Netherlands, and some other countries increased their exports of our soybeans because the price of our soybeans was much lower compared to South American soybeans,” Kirchhofer added.
Kirchhofer says now because China is back in the mix with U.S. trade, it could bring much more money into central Illinois farmers’ pockets.
Kirchhofer hopes this new deal will help get trade relations back to the way they were before the Trade War.
“In 2017, before the Trade War, we were exporting around 30% of our soybean crop to China. Whenever their tariff came into effect in July of 2018, that went down to zero. In 2019, we’ve recovered about half of that export market to China,” Kirchhofer said.
Illinois Soybean Growers President Doug Schroeder, a soybean producer from Mahomet, Ill., released the following statement in response to U.S. and China trade progress.
“We have a hopeful attitude today as we look at these trade negotiations. We are optimistic that the day will come when we fully restore our vital trading relationship between the U.S. and China. I can’t underscore enough how much long-term trade stability with one of our top customers means to Illinois soybean farmers and the ag industry. We see this as a sign of brighter days to come. However, we hope that more details emerge on the status of China’s current tariff on U.S. soybeans, which were not included in today’s trade deal. A long-awaited win for the soybean industry will come when the soybean tariffs are fully rescinded, and we are anxiously awaiting that announcement. Again, today’s news is met with optimism and we are encouraged that further negotiations and general goodwill will continue.”Doug Schroeder | President | Illinois Soybean Growers Assocation
Kirchhofer says before the Trade War, soybeans cost nearly $10 a bushel. After the trade war, he says the price of soybeans dropped 20% down to $8 a bushel.
Spring of 2019 didn’t make anything easier for farmers as communities around the midwest saw extreme flooding.
Kirchhofer says while trade relations between the United States and China stopped, that doesn’t mean products didn’t still get from one country to the other.
“Argentina, of all things, became our #1 exporter of soybeans after the Trade War with China. Argentina is normally a top producer of soybeans. So in a way, the soybeans were going through Argentina to get to China,” Kirchhofer said.
The news broke that the trade deal had been signed just after 10 a.m. CT on Wednesday, you can read more here.