China doesn't need US soybeans, thanks to Richard Nixon

Posted Wednesday, 14 August 2019 ‐ CNN

Washington (CNN)President Donald Trump is upset with China for buying Brazilian soybeans instead of American ones amid the ongoing trade war, but the South American industry got its start thanks to an earlier round of protectionist policies under President Richard Nixon. Nixon temporarily froze the prices of consumer goods and restricted exports of food in 1973 in response to rising inflation, a move that essentially cut off exports of US soybeans. It worked, creating a surplus and lowering pricesfor American consumers. But the embargo -- which lasted for just three months -- prompted Brazil to step up its supply, particularly to Japan, creatinga formidable competitor on the world agricultural stage and leaving a lasting impact on the American soybean industry. "It inspired the Japanese to go look for somebody else and, basically, that action created the Brazilian soybean industry," said Andrew Novaković, a professor of agricultural economics at Cornell University.Brazil nearly tripled its soybean production over the next decade, and growth continued as Japan made financial investments to help turn Brazil's wooded grasslands into a suitable place to grow soybeans -- a move that also accelerated deforestation in the country. Now Brazil is the second biggest soybean producer in the world, and it's where China'sfarmers have been getting a lot of their soybeans since Beijing imposed retaliatory tariffs on US agriculture.Last year was an "extraordinary one for Brazilian soybean producers," according to a recent report from the US Department of Agriculture. Demand from China grow by more than 20%. Before Beijing targeted US-grown agricultural products with tariffs, China was the biggest market for American soybean growers. Some US farmers, who have been some of those hardest hit by the trade war, are worried they won't ever get the Chinese market back. "I don't think, from an agricultural perspective, that we'll be a primary supplier to China again," said Grant Kimberley, who grows soybeans and corn in Iowa and is the director of market development at the Iowa Soybean Association."I think the Chineseare pouring money into South America right now," he added. Brazil can't meet all the soybean demand in China, which typically buys a majority of the world's production. But Argentina, India and Russia could be other options if relations with the US don't improve. Beijing essentially stopped buying soybeans from the United States last year. Heading into the spring planting season, farmers had a record number of soybeans in storage. Earlier this year, long-term forecasts from the Department of Agriculture projected that the American soybean export market won't recover to 2017 levels until 2024.Farmers are important to Trump's base, and the President has shielded them with a $28 billion aid package designed to blunt the impact of the trade war. "Our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do - And I'll do it again next year if necessary!" Trump tweeted last week.At a recent event with farmers in Minnesota, Agriculture Secretary Sonny Perdue said American soybean farmers have been too reliant on the Chinese customers and also argued that China will buy from wherever it sees is the best value, after the trade deal is reached. "I think we'll gain the market back. But it's got to be a fair, reciprocal and free trade environment, not allowing China to cheat," Perdue said.But Beijing has been slow to restart any agricultural purchases as negotiations continue, pushing Trump to threaten new tariffs on $300 billion in Chinese goods. Last week, Beijing halted any purchases in response to Trump's new threat. Farmers said they don't think things will go back to normal anytime soon."I wouldn't be surprised if this lasts until after the election," said Kimberley. "This may be the new normal for the next decade."

Other articles published by CNN

Posted Thursday, 23 January 2020 ‐ CNN

(CNN)Sonos, a company known for its wireless speakers, announced earlier this week that certain older products would lose software support come this May. On Thursday, amid backlash, the CEO walked back those statements."All Sonos products will continue...

Posted Thursday, 23 January 2020 ‐ CNN

New York (CNN Business)23andMe, an at-home DNA testing company, is laying off 100 people, or about 14% of its workforce, the company confirmed to CNN Business on Thursday.News of the layoffs, first reported by CNBC, comes amid waning demand for consumer...

Posted Thursday, 23 January 2020 ‐ CNN

Washington (CNN)The National Archives on Wednesday installed an original photograph of the 2017 Women's March days after removing an altered one that censored signs referencing women's anatomy and President Donald Trump's name.The original photograph,...

Posted Thursday, 23 January 2020 ‐ CNN

New York (CNN)A group of women who allege they were abused by disgraced OB-GYN Robert Hadden called for the resignation of Manhattan District Attorney Cyrus Vance on Thursday.At an early-morning news conference outside New York's City Hall, Hadden...

Posted Thursday, 23 January 2020 ‐ CNN

(CNN)This year's song of the year Grammy nominees may seem to mostly be about love, but let's go a little deeper than that.The eight nominees actually have some valuable life lessons if you listen closely.Check it out:"Always Remember Us This...

Posted Thursday, 23 January 2020 ‐ CNN

(CNN)A pediatric healthcare worker in Michigan was ill with tuberculosis and didn't know it while working in several locations over nine months, the state's health department said.The worker was recently diagnosed with pulmonary tuberculosis, and the...

Posted Thursday, 23 January 2020 ‐ CNN

Washington (CNN)House Judiciary Chairman Jerry Nadler on Thursday played a 1999 video of Republican Sen. Lindsey Graham arguing that "high crimes" don't "even need to be a crime," a statement that runs counter to a central Republican talking point in...

Posted Thursday, 23 January 2020 ‐ CNN

David A. Andelman, Executive Director of The RedLines Project, is a contributor to CNN where his columns won the Deadline Club Award for Best Opinion Writing. Author of "A Shattered Peace: Versailles 1919 and the Price We Pay Today," and the forthcoming...

Posted Thursday, 23 January 2020 ‐ CNN

(CNN)Philadelphia Police are investigating a man's claim that Gritty, the mascot of the Philadelphia Flyers hockey team, punched his teenage son in the back.Chris Greenwell, a season ticket holder of more than two decades from Delaware, told CNN the...

Posted Thursday, 23 January 2020 ‐ CNN

January 24, 2020January 2020 marks 75 years since Soviet troops liberated the Auschwitz-Birkenau concentration camp. Today's show features reports on the camp itself and a Holocaust remembrance center in Israel. We're also explaining what it ...

Posted Thursday, 23 January 2020 ‐ CNN

New York (CNN Business)More than two months after announcing a review of his work, The Hill newspaper has yet to complete its promised evaluation of columns written by John Solomon, a former executive at the outlet who during his time at the publication...

Posted Thursday, 23 January 2020 ‐ CNN

Washington (CNN)A Libyan man who acted as a scout for the Islamist militia that stormed the US consulate in Benghazi in 2012 was sentenced to 19 and a half years in prison Thursday by a federal judge in Washington. Mustafa al-Imam was convicted last...

Posted Thursday, 23 January 2020 ‐ CNN

(CNN)One of the stars of NBC's "This Is Us" is headed to the Academy Awards stage.Chrissy Metz is set to be among the musical performers at the upcoming Oscars, the Academy of Motion Picture Arts and Sciences announced Thursday. Metz will be performing...

Posted Thursday, 23 January 2020 ‐ CNN

(CNN)White supremacist Christopher Cantwell has been arrested and charged with sending an extortionate and threatening interstate message, according to the FBI office in Boston.Cantwell was one of the organizers of the hate-filled marches through...

Posted Thursday, 23 January 2020 ‐ CNN

Washington, DC (CNN)A bill that would expand voting rights to some immigrants who are not US citizens was introduced Thursday in the New York City Council. City Councilman Ydanis Rodriguez, an immigrant from the Dominican Republic, is sponsoring the...