China is a very important customer for the U.S. soybean industry. The two countries began industrial cooperation 43 years ago, and the current escalation of tariff disputes is disappointing. Jim Sutter, CEO of the U.S. Soybean Export Council (USSEC), expressed in an exclusive interview that the current tariff rates are too high, and unless certain special circumstances arise, trade between the U.S. and China is unlikely to resume, which is not good for the U.S. industry.
Regarding the U.S.-China "trade war," Sutter prefers the term "disagreement." As the two major economies in the world, any disagreement between the U.S. and China can easily affect trade. He stated that, as previously mentioned by China, higher tariffs have no practical significance and could become a joke in global economic history. "Hopefully, we will come out with a trade agreement in the relatively near future that will get this trade back on track again."
According to data provided by USSEC, the U.S. soybean planting areas from 2022 to 2024 are projected to be 35.39 million hectares, 33.83 million hectares, and 35.22 million hectares, with annual production reaching 116 million tons, 113 million tons, and 118 million tons, respectively. During the same period, U.S. soybean exports to China are expected to be 30.23 million tons, 26.39 million tons, and 27.21 million tons, with average export prices of US$593, US$571, and US$472 per ton, respectively. During these three years, China imposed a 3% tariff and a 9% VAT on U.S. soybean imports. Amid the escalation of China-US tariff disputes, industry insiders are concerned that American soybeans will rapidly lose competitiveness in the Chinese market.
"We started our business in the Chinese market in 1982 and began exporting U.S. soybeans and related products to China in 1995," Sutter said. He worries that the high tariffs will disrupt normal trade between the U.S. and China. Despite this, he remains optimistic that the leaders of both countries have the wisdom to resolve their differences and restore bilateral trade in some way in the future, "just like we did back in 2020 with the phase one agreement."
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