US risks losing agricultural section of Chinese market as result of trade friction

By Hu Weijia Source:Global Times Published: 2018/7/26 23:38:41

A most likely consequence of a trade war between China and the US is that some agricultural products may lose the Chinese market forever.

The Trump administration announced recently that it would provide up to $12 billion in emergency relief for farmers hurt by the ongoing trade friction with China, but Bloomberg cited Neal Bredehoeft, a corn and soybean farmer in Missouri, as saying Thursday that what US famers want is a quick return to free trade, rather than handouts from the US government.

As trade tensions continue, however, the farmers' wish won't come true. It's possible that the trade conflict will evolve into a prolonged trade war, in which Chinese companies will have to draw up long-term plans to diversify their import sources.

If trade tension between China and  the US lasts longer than one planting season, the planting areas for corn and soybeans in Brazil and other countries are likely to increase in a bid to fill the gap in the Chinese market left by US agricultural products.

US farm produce is facing increasing competition in the Chinese market. There is no doubt a 25 percent additional tariff on a range of US farm produce will deal a fatal blow to China's imports of those items.

New distribution channels set up by Chinese importers that switch to new suppliers in other countries, and Chinese consumers' acceptance of the new farm products, will perhaps drive US farm produce out of the Chinese market.

China is one of the world's largest importers of agricultural goods. In 2017, the nation imported $24 billion worth of US farm produce, including more than 32.9 million tons of soybeans, accounting for 34.4 percent of China's total imports of that crop. The question is whether US farmers are able to afford to lose such a huge market forever.

A wider range of US products risk losing their largest consumers in China. China doesn't want a trade war, but Washington may be playing a long game, so Chinese companies have to find alternative import sources other than the US.

With a growing army of middle-class consumers, China is one of the world's most promising markets for business opportunities, but US sellers may miss the chance to meet China's increasing demand in the global markets.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON ECONOMY

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