In response to Donald Trump’s tariffs on steel and aluminum imports, China has imposed a new soybean tariff that is hitting home with the agriculture industry. As your partner, we want to keep you informed in this constantly evolving industry climate.
China’s recent 25% tariff on soybeans imported from the United States could have dramatic consequences on the soybean industry as a whole. This tariff will practically force Chinese consumers to buy soybeans from other producers, such as Brazil, in order to avoid the steep increase in cost.
On the opposite side of supply is demand. As this tariff is implemented, the price of soybeans will increase as the demand decreases.
Before the tariff went into effect, a team from Purdue University released their findings from a study for the U.S. Soybean Export Council. While they used a 30% tariff on soybeans in this test scenario, as opposed to the 25% proposed currently, the results remain extremely impactful:
- 71% reduction in Chinese imports of U.S. soybeans
- 40% decrease in total U.S. soybean exports
- 17% decline in U.S. soybean production
Experts have highlighted two big-picture points of impact: “a decline in U.S. soybean exports and a reduction in global soybean imports.” Already, U.S. soybean futures took a steep decline in June, dropping 14% on the Chicago Board of Trade. The full impact of the tariff remains to be seen in the fall when U.S. soybeans are harvested.
Acadian Industrial Textiles will continue to provide coverage on the tariffs as the trade war continues to evolve.