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Arab News
2 days ago
- Business
- Arab News
The US-China trade war's consequences for agriculture
The trade war initiated by the Trump administration, particularly focused on China, has sparked widespread debate about its implications for various sectors, especially agriculture. As tariffs have been imposed on numerous goods, the US agricultural sector faces significant challenges, particularly concerning essential exports like soybeans and corn. This article examines the consequences of the trade conflict, especially regarding food security and weaponry, while also assessing the position of developing countries, with a specific focus on Saudi Arabia. Understanding these dynamics is crucial for formulating strategies that mitigate negative impacts and foster collaboration in an increasingly interdependent global economy. The US-China trade war was started with the intent to rectify perceived trade imbalances and protect American industries. The administration's tariffs aimed to shield domestic producers from foreign competition and address issues related to intellectual property theft. However, the immediate fallout of these tariffs has been a disruption in agricultural exports, particularly to China, which has historically been one of the largest markets for US agricultural products. American farmers, particularly those in Republican strongholds, have reported significant declines in sales, leading to financial distress. The repercussions extend beyond individual farms, threatening the broader agricultural sector's viability and influencing global food security. This conflict has highlighted the fragility of agricultural markets, which are intricately linked to international trade dynamics. The imposition of tariffs has led to a significant decrease in US agricultural exports to China, particularly in commodities like soybeans, which have seen a dramatic fall in demand. As Brazil and Argentina have ramped up their production and captured market shares, US farmers are finding it increasingly difficult to regain access to these crucial markets. The historical example of the 1980s grain embargo against the Soviet Union serves as a cautionary tale, illustrating how protectionist measures can backfire, hurting domestic producers while leaving foreign competitors relatively unscathed. Additionally, the psychological burden on American farmers cannot be overlooked. The uncertainty surrounding trade relations has led to fears of economic instability, with farmers expressing concerns over unsold crops and the long-term viability of their operations. Kenneth Hartman of the National Corn Growers Association encapsulated this anxiety by emphasizing the dire consequences of prolonged disconnection from the Chinese market. Food security has historically been a pivotal aspect of international relations. The US has often leveraged its agricultural prowess to exert influence over other nations, particularly in developing countries. Following its sanctions on Russia, the US sought to intertwine agricultural economies with its own, thereby fostering dependency through strategic practices. This raises questions about the ethical implications of using food security as a tool of power. In contrast, Saudi Arabia's approach to agricultural self-sufficiency offers a compelling counternarrative. By investing significantly in domestic agriculture, the Kingdom aims to reduce reliance on external sources, thereby enhancing national food security. This strategic pivot underscores the importance of sovereignty in food production and highlights the potential of developing nations to chart their own paths in the face of global trade pressures. Historically, John R. Block, who was secretary of agriculture in the Reagan administration, advocated for self-sufficiency in developing nations, promoting the idea that countries should cultivate their agricultural capabilities to reduce reliance on imports. However, this notion becomes paradoxical when considering that many developing countries could achieve food security more efficiently through American agricultural products. This dynamic illustrates a broader strategy of domination: controlling food equates to wielding power. By fostering dependency on US agricultural exports, America not only secures its own economic interests but also reinforces its geopolitical influence. A compelling counterexample to this paradigm is Saudi Arabia, where King Fahd's administration made a strategic pivot toward agricultural self-sufficiency, directly challenging US recommendations that favored external dependence. Recognizing the vulnerabilities associated with food imports, the Saudi government invested heavily in domestic agriculture, focusing on initiatives that would enhance local production capabilities. These investments led to significant advancements in technology, irrigation systems and agricultural practices, resulting in increased yields and a reduced reliance on imported food. This pursuit of self-sufficiency not only enhanced food security for Saudi Arabia but also economically empowered its citizens by creating jobs, fostering local industries and integrating them into the agricultural mainstream. Farmers received training and resources that allowed them to contribute to a more robust domestic agricultural sector, ultimately leading to greater national pride and resilience against global market fluctuations. Saudi Arabia's approach underscores the importance of national sovereignty in food security, highlighting that self-sufficiency can be achieved through strategic planning and investment rather than reliance on external sources. This successful policy serves as a valuable lesson for other nations, particularly those in similar geopolitical situations, emphasizing that prioritizing local agricultural development can lead to sustainable food security and economic empowerment. Saudi Arabia's pursuit of agricultural self-sufficiency serves as a valuable lesson for other nations. Dr. Turki Faisal Al-Rasheed Furthermore, as global food systems continue to evolve, the Saudi model demonstrates that countries can effectively balance self-sufficiency with international trade. By developing a robust domestic agricultural sector while maintaining trade relationships, Saudi Arabia has positioned itself to navigate the complexities of global food markets more effectively. This dual approach not only secures its food supply but also enables the country to play a more influential role in regional and global food security discussions. In conclusion, while the US promotes self-sufficiency in developing nations as a means of encouraging independence, the Saudi experience illustrates that achieving food security can also involve strategic investments in local agriculture. By recognizing the interplay between self-sufficiency and international cooperation, countries can develop more resilient food systems that protect their interests while contributing to global food security efforts. Developing countries, often caught in the crossfire of US-China trade tensions, face unique challenges. Many of these nations rely on agricultural exports to sustain their economies, making them particularly vulnerable to market fluctuations triggered by trade wars. The trade conflict can exacerbate existing inequalities, as wealthier nations with greater resources can better absorb the shocks of tariffs and retaliatory measures. In the context of Saudi Arabia, while the nation has made strides toward agricultural self-sufficiency, it remains heavily dependent on imports for various food products. The trade war complicates these dynamics, as rising food prices and market instability can threaten food security for vulnerable populations. The interplay of global trade and domestic agricultural policies thus becomes crucial in ensuring that developing nations can navigate these challenges effectively. Given the complexities of the trade war and its implications for agriculture and food security, several strategies can help mitigate negative impacts on both the US and developing nations. Firstly, pursuing diplomatic resolutions to enhance trade access with key markets, particularly China, can create a more stable environment for agricultural exports. Constructive dialogue focused on fair trade practices can cultivate cooperation and trust. Secondly, innovating through sustainable farming practices can enhance productivity and food security. Investing in technology such as precision farming can position US farmers to compete effectively in both domestic and international markets. Thirdly, forming strategic partnerships with countries facing similar agricultural challenges can establish a united front in advocating fair trade practices. Collaborating with nations with aligned agricultural interests can bolster global food security. Fourthly, encouraging farmers to diversify their export markets can reduce dependence on any single nation. By exploring opportunities in emerging markets, US agriculture can build resilience against trade disruptions. Finally, providing support to developing nations through investment, technology transfer and capacity building can help them achieve greater self-sufficiency in food production. This, in turn, can enhance global food security by reducing reliance on a few dominant suppliers. In summary, the trade war's impacts reach far beyond the immediate economic consequences for US farmers. They challenge the very foundations of global food security and the strategies employed to navigate this conflict will determine the resilience of agricultural sectors worldwide. As nations strive to adapt to these changes, the lessons learned from both the US and Saudi Arabia will prove integral to developing sustainable pathways for food security and economic cooperation in the future. The ongoing trade war between the US and China has significant implications for agriculture and global food security. As American farmers grapple with the challenges posed by tariffs and market disruptions, it is essential to consider the broader consequences of these actions on developing nations. By adopting a balanced approach that emphasizes collaboration, innovation and strategic engagement, the US can navigate the complexities of the global trade landscape. The decisions made today will shape the future of agriculture and international relations for generations to come. Through resilience and strategic foresight, American agriculture can not only weather the storms of trade conflict but also reaffirm its role as a leader in global food production. In an interconnected world, fostering cooperation and embracing the realities of global trade will be crucial for ensuring a sustainable and secure future for all nations.
South China Morning Post
23-05-2025
- Business
- South China Morning Post
US ‘gold card' fails to lure rich Chinese, Shenzhen exports decline: SCMP daily highlights
Catch up on some of SCMP's biggest China stories of the day. If you would like to see more of our reporting, please consider subscribing Three months after he first floated the idea, Trump's gold card scheme appears to have fallen flat with China's wealthy, who were expected to be one of the biggest sources of demand for the controversial new visa. China's top exporting city saw its levels fall in April despite stronger-than-expected national growth, suggesting traders are not yet out of the woods amid tumultuous tariff tensions with the US. China has long been a key export market for US farmers, with America exporting more than US$12.8 billion of soybeans to the country last year. Photo: AP China's imports of American soybeans and pork plunged to zero in early May and have yet to recover despite the US-China tariff truce, suggesting the trade war may have done lasting damage to a key US export trade.
South China Morning Post
23-05-2025
- Business
- South China Morning Post
US farmers feel pain as soybean exports to China flatline despite tariff truce
China's imports of American soybeans and pork plunged to zero in early May and have yet to recover despite the US-China tariff truce, suggesting the trade war may have done lasting damage to a key US export trade. Advertisement For years, China has been a vital market for US agricultural products, with American farmers exporting more than US$12.8 billion of soybeans alone to the country in 2024, according to US government figures. But that trade was almost entirely severed after US President Donald Trump launched an unprecedented trade war against Beijing in early April, which saw both sides hike tariffs on each other's goods by more than 100 percentage points in a series of tit-for-tat moves. Chinese imports of American soybeans and pork – previously two of the US' most important export categories in trade with China – plunged dramatically from early April and flatlined completely in early May, according to data from the US Department of Agriculture. US pork exports to China showed signs of recovery in the days following May 12 – when the two sides announced a temporary deal to de-escalate the trade war – with new orders bouncing back to close to pre-April levels, though shipments remained low as of May 15, the data showed. Advertisement However, US exports of soybeans to China remained at zero as of May 15, with no new purchase deals having been struck.
South China Morning Post
23-05-2025
- Business
- South China Morning Post
US farmers feel pain as soybean exports to China flatline despite tariff truce
China's imports of American soybeans and pork plunged to zero in early May and have yet to recover despite the US-China tariff truce, suggesting the trade war may have done lasting damage to a key US export trade. For years, China has been a vital market for US agricultural products, with American farmers exporting more than US$12.8 billion of soybeans alone to the country in 2024, according to US government figures. But that trade was almost entirely severed after US President Donald Trump launched an unprecedented trade war against Beijing in early April, which saw both sides hike tariffs on each other's goods by more than 100 percentage points in a series of tit-for-tat moves. Chinese imports of American soybeans and pork – previously two of the US' most important export categories in trade with China – plunged dramatically from early April and flatlined completely in early May, according to data from the US Department of Agriculture. US pork exports to China showed signs of recovery in the days following May 12 – when the two sides announced a temporary deal to de-escalate the trade war – with new orders bouncing back to close to pre-April levels, though shipments remained low as of May 15, the data showed. However, US exports of soybeans to China remained at zero as of May 15, with no new purchase deals having been struck.
CNA
16-05-2025
- Business
- CNA
Why India's farmers are worried about US push to export dairy, grain products
ROHTAK, India: Farmers in India's rice and wheat belt state of Haryana are worried that imports from the United States will flood the market if agricultural duties are lowered as a result of bilateral trade negotiations. Washington is pushing to export US dairy and grain products to India, as part of efforts to balance its US$45 billion trade deficit with New Delhi. But those like wheat and rice farmer Sunil, who prefers to go by one name, said the government should push back on demands to open up the sector. 'Farmers have already been demanding that the government buy our grains at 1.5 times the cost of farming but aren't getting that price. On top of that, if they lower taxes on US imports, then the local farmers will be finished,' said Sunil. Farmers in one Haryana village are worried that their problems will only worsen if American grains start flooding the market. They said an existing oversupply of wheat in the Indian market has made it a struggle in some seasons to sell all the wheat produced. UNEVEN PLAYING FIELD Indian farmers earn about US$160 each month - or roughly US$1,920 annually - from agriculture and husbandry. In comparison, the median income of US farmers who are supported by larger land holdings and a more mechanised agricultural system was approximately US$98,000 in 2023, according to US government data. Sunil said this is why US farm products could have a competitive advantage over Indian farmers. 'Agriculture is a commercial activity for American farmers. For us it's about sustenance,' he said. Dairy producers like Sanjay Dalal are also worried about competing with American agricultural imports, which they say could sound the death knell for them. The owner of Dalal Dairy Farm said he makes US$500 to US$600 in a good month. But during bad times, he barely milks enough from his cattle to break even. There are 80 million dairy farmers in India, many of them small operators like Sanjay who owns 30 buffaloes. He said farms like his are already struggling, and that he does not think other farms would survive any competition with US dairy companies. 'America is a rich country. American companies can afford to offer dairy products at cheap rates for a long time to compete with us. And their quality might be fine too,' he added. US dairy producers have access to tens of billions of dollars in government subsidies annually, while Indian dairy farmers said they receive barely enough assistance to support their businesses. This uneven playing field is one of the reasons why India imposes import tariffs of up to 60 per cent, which the US says is protectionist. MORE THAN JUST BUSINESS India also restricts dairy from bovines that eat feed derived from animal products. This is because Hindus, who make up about 80 per cent of India's population, consider milk and dairy products to have religious significance. It is viewed as a staple food item which is also offered to gods during prayers. Analysts said this means India will unlikely budge on importing such dairy products, despite US pressure. 'There will be uproar at all the levels - cultural level, political level, citizen level. Somehow (the) Indian psyche cannot accept eating butter or milk from a cow that has been fed meat,' said Ajay Srivastava, founder of trade policy think tank Global Trade Research Initiative. As US President Donald Trump's administration seeks to finalise a trade deal with India, analysts are expecting concessions across a broad range of sectors including automobiles, pharmaceuticals and steel goods. But analysts are cautious over any concessions relating to the agricultural sector, which employs about 60 per cent of the country. Many dairy and wheat farmers said the survival of their businesses is at stake, with supply and demand concerns being a 'bread-and-butter' issue that India cannot afford to concede. Local media have reported that India is wary of broad reductions of tariffs in its agriculture sector amid the ongoing trade talks with the US, fearing such cuts might affect areas vital for the survival of its farmers and small industries. 'It's not a trade issue for us,' said Ajay. 'It's (a) livelihood issue for 700 million people and we cannot fiddle with their (lives).'
