Chinese economists say Beijing is likely to turn to shipments from friendly nations and encourage domestic farm production if there is a rupture in agricultural trade with the United States, said AgriCensus, based in London. The market news agency said a report published by the Chinese Academy of Agricultural Science estimated “bilateral taxation between the United States and China will cause U.S. agriculture exports to China to shrink 40 percent” by 2035.
Trade in soybeans would tumble by half, according to a simulation described in the academy’s first China Agricultural Development Report. In response, according to AgriCensus, China would “strengthen trade with one-belt-one-road countries and increase the import of soybean substitutes.” More than five dozen countries have pledged to join the One Belt One Road initiative by China to weave trade routes and partners while building infrastructure for land and sea transport.
At the same time, China would ramp up domestic wheat and rice output.
China is the largest market for U.S. farm exports, accounting for $1 of every $7 in exports. Some $14 billion in U.S. soybeans were shipped to China last year.
The Trump administration says it will impose 25 percent tariffs on $50 billion of Chinese high-tech products on July 6 as punishment for piracy of intellectual property. China has said it will respond with tariffs of the same volume on U.S. soybeans, beef, cotton, corn, ethanol, dried distillers’ grains, grain sorghum, wheat, cranberries, orange juice, tobacco, and whiskey, along with industrial products. When the U.S. announced tariffs on imported steel and aluminum earlier this year, China set a 25 percent tariff on U.S. pork and 10 percent tariffs on U.S. ethanol, apples and almonds.