By: Sid Salter
For Mississippi farmers, the transition between the administrations of former President Donald Trump and President Joe Biden could not be more impactful on any topic more so than in agricultural trade with China.
China is the third leading trading partner for Mississippi exports behind Canada and Mexico, with $759 million in value in 2020 – with that number representing a 63.8 percent increase over the previous year. That grow came after 2018-2019 tariffs standoff between China and the Trump administration led to hundreds of millions in lost export revenues to Mississippi producers.
A 2020 study by Business Roundtable found that international trade supported 326,200 Mississippi jobs in 2018. The same study found that in 2018, trade with China supported 64,000 Mississippi jobs – which highlighted the need for China to abide by the commitments under the “phase one” trade agreements.
Writing in Foreign Policy on Oct. 27, 2020, Clark Packard framed the U.S. China trade standoff succinctly: “Trump’s aggressive trade war with China took things from bad to worse for U.S. farmers. Over the course of about 18 months, Washington and Beijing engaged in a back-and-forth volley of escalating trade restrictions, including Chinese retaliatory tariffs on more than 1,000 categories of U.S. agricultural products such as pork, soybeans, dairy products, and nuts.
“In January 2020, the two sides signed a detente, but it’s only a temporary reprieve to a conflict that continues to fester and is likely to resurface in the near future. As part of the so-called phase one agreement, Beijing agreed to purchase about $32 billion worth of U.S. agricultural products over two years,” he observed.
Why should this matter to Mississippians? China’s path to superpower status is blocked most readily by their struggle to produce enough food to feed its own 1.4 billion population and also influence and alleviate regional concerns over hunger and food insecurity.
China has been able in recent years to produce rice and wheat sufficient to meet the nation’s needs, but still must import soybeans and corn as feedstuffs sufficient to satisfy the population’s growing taste for meat.
Not only is China’s massive population problematic in producing hunger and food insecurity issues, but pollution, water aquifer depletion, and the impacts of climate change are also threatening future internal abilities to feed that nation and her allies. The loyalty of regional neighbor nations dependent on food aid also remains in the balance moving forward.
In reaction to the U.S.-China trade standoff, Mississippi (along with Indiana, Illinois, and Nebraska) in 2019 cut a trade deal with Taiwan for them to import about $2 billion in soybeans and corn in 2020 and 2021.
But prior to the trade war, about 80 percent of the state’s soybean production was being sold to China. Under Biden’s new Secretary of Agriculture, initial reports are that China is living up to most of its pledges on the “phase one” trade deal. That deal called for China to buy $12.5 billion in American agriculture products in 2020 and another $19.5 billion in 2021.
Vilsack blames the COVID-19 pandemic as an obstacle to China’s meeting the deal but says he’s optimistic and with apparent evidence on his side. Politico reports that U.S. farm exports are projected to hit a record $31.5 billion during Biden’s first year in office – some $4.5 billion than projected in November 2020.
Mississippi farmers producing soybeans and corn hope those projections are accurate and that Biden’s national security and trade advisors can restore American access to vital Chinese markets.
Despite global concerns over the future of shipping, trade and maritime security issues in the South China Sea, it remains advantageous for China to keep imports of food and feed grains coming to supplement what they can’t successfully produce on their own.
Before the Trump trade wars, two of every three Mississippi soybeans were sold to China. Mississippi farmers would like to see that trade relationship restored.