China Retaliates Against American Soybeans, And Ohio Feels The Pain
After placing a 25 percent tariff on U.S. pork and a 15 percent tariff on other goods like fruit and wine earlier this week, China is now threatening to go further. China is looking to expand its scope to exports essential to Central Ohio’s economy, including soybeans, beef and cars.
The effective start date hasn’t been announced, but China’s Ministry of Commerce says the tariffs would target up to $50 billion of U.S. products annually.
On Tuesday, the Trump administration proposed 25 percent tariffs on $50 billion dollars in Chinese imports, aimed at protesting what the administration calls unfair trade practices. The tariffs cover products used in sectors like robots and information technology, plus products like medical equipment and dishwashers.
In response, China said it would retaliate against the new measures with 25 percent hikes of its own.
“We will prepare equal measures for U.S. products with the same scale," a ministry spokesperson said on the Xinhua News Agency.
Neither country has selected a start date to impose their respective tariffs.
This new round of tariffs would apply to some products that are integral to Ohio’s export economy. The impact will reach the Marysville Honda plant, as the new tariffs would apply to several types of vehicles.
“It includes SUVs, which is the fastest growing segment in the Chinese market,” says Oded Shenkar, a professor at the Ohio State Fisher College of Business. “And it includes plug-ins, because the Chinese definite strategy is to try if you want to capture leadership in the automotive market by leap-frogging into the next generation.”
The tariffs would also apply to soybeans, another blow to Ohio's economy. Some 26,000 Ohio farmers produce about $2.5 billion in soybeans every year - and China is the number one buyer.
“Soybeans are the number one crop in Ohio and by far the number one cultural export,” says Kirk Meritt, director of the Ohio Soybean Association. “About half of our Ohio ag exports are soybeans.”
On Wednesday morning, after China's announcement, the price of soybeans dropped about 40 cents. Bret Davis, a farmer in Delaware County, says that could mean thousands of dollars lost.
“That could affect my farm just in this one day over $35,000," Davis says. "That’s very impactful in the farm economy. And this is just announced, it’s not in effect. So this is just the rumor."
Meritt says his focus now is to work with politicians to prevent the U.S. from implementing our tariffs, so that China doesn’t feel the need to retaliate.
“Our hope is that they don’t get implemented. There’s still time to negotiate that. There’s still time to advocate in a way that they might not be implemented,” Merritt says. “That’s our number one goal. To work with our elected officials and encourage them to negotiate in a way that the tariffs don’t get implemented.”
Earlier rounds of tariff-raising also threatened to affect Ohio farmers. China's tariffs on U.S. pork alone could make an indent in the state's $600 million pork business. Those tariffs were announced in response to Trump's declaration of tariffs on Chinese steel and aluminum.
The U.S. government opened a public comment period that lasts until May 11, and a hearing for the tariffs is set for May 15. Companies and consumers alike will be able to lobby to have some products added to the list or taken off.