According to a report at Reuters, China will struggle to replace U.S. soybean supplies after implementing an additional 25% tariff on American shipments, likely inflicting severe financial pain on domestic companies, analysts and executives at feedmakers said.
The world’s top importer of the oilseed will impose the tariffs on soybeans and 105 other U.S. products, state broadcaster CCTV said on Wednesday, an expected retaliation following Washington’s aggressive trade actions.
Soybeans are considered one of the most powerful weapons in Beijing’s trade arsenal because a drop in exports to China would hurt Iowa and other farm states that backed U.S. President Donald Trump. Soybeans were the biggest U.S. agricultural export to China last year at a value of $12 billion.
China gobbles up about 60% of globally traded soybeans to feed the world’s largest livestock industry. Factories crush the oilseed to make meal - a key ingredient in animal feed.
“There simply aren’t enough soybeans in the world outside of the U.S. to meet China’s needs,” said Mark Williams, chief Asia economist at Capital Economics.
Read the full report here.
