US-China Trade: Sell US Soybeans – And Get Played

I have a bad feeling about the U.S. – China trade negotiations. One gets the impression President Trump is so keen for a deal that he’s walking into trouble.

One thing China is playing him on is soybeans. Trump has called for a 4x increase in Chinese purchases of US soybeans. However, the Chinese aren’t buying and instead are buying soybeans from the Brazilians, who according to reports, can meet China’s entire demand.

But I’ll bet Beijing eventually ‘concedes’ on soybeans and agrees to buy a lot of American ones.

One trade expert told me: “I am reasonably confident that — thanks to that other export to us, Salt Typhoon (PRC government-backed hackers) — the Chinese knew the administration would make this ‘demand;’ Beijing might have even ‘incepted’ the idea and then spun up the soybean industry to lobby for it.”

Chinese trade warfare has indeed successfully influenced U.S. soy farmers so that they are literally and psychologically totally dependent on China.

The CCP wants to convert that sense of dependence into farmers appealing and lobbying Washington, DC to keep the soy trade lines open and free of interference, because it is their “lifeline”. And they are, after all, voters who can make a difference in who sits in Washington.

A recent letter from the American Soybean Association to President Trump suggests the Chinese strategy of ‘pressure by local proxies’ is working. The letter notes:

“U.S. soybean farmers cannot survive a prolonged trade dispute with our largest customer … Mr. President, you have strongly supported farmers and farmers have strongly supported you. We need your help.”

One marvels at U.S. soybean farmers’ total ignorance of the customer. Who would be foolish enough to make China their chief customer? Apparently most U.S. business and industry if the last 40 years are anything to go by.

So suppose China agrees to buy more soybeans from the United States.

Read more HERE.