North Dakota Farmers Union President Mark Watne called today’s signing of a partial trade deal between the U.S. and China a good first step toward resolving the ongoing trade war between the two countries. “We hope this first phase of the deal is real and not just rhetoric. The trade war the president said would be easy has been extremely difficult,” Watne said. “Farmers and ranchers paid the price.”
While the type of agricultural products China will purchase was not disclosed, the agreement calls for China to purchase $40 to $50 billion in agricultural products in each of the next two years. In 2017, China purchased nearly $24 billion. Watne said the agreement will be a solid increase, if China follows through.
“I’m cautiously optimistic, but the agreement doesn’t cover our lost sales to China, and it will take time to regain our market share and restore our reputation as a reliable trading partner,” he said. “Hopefully, this will create the demand we need to move our markets up.”
U.S. agricultural exports to China fell from $21.4 billion in 2016 to $9.2 billion in 2018. Soybeans, which have long been the top overall U.S. export to China, fell from $14.2 to $3.1 billion over the same time period.
“Until vessels carrying U.S. agricultural products are landing in Chinese ports, I’m going to be holding my breath a bit,” Watne added, noting the Chinese purchased 800,000 tons of Brazilian soybeans last week. “Enforcement will be the key. We will need to mend fences with other countries to hold China’s feet to the fire. We should have used a coalition of trading partners from the start.”
Regardless of the agreement, Watne said the administration and Congress can’t let their guard down. “This is the first step forward after many steps back. We know the effects of the trade war will be felt for years to come. As the administration works to rebuild our markets, they must also support producers dealing with the lingering fallout.”