• June 25, 2024

Soybeans Play Important Role In Slump In U.S. Economy

The trade war between the U.S. and China is shaking the entire global growth.

In the U.S. home prices are going down, while the household expenses are declining with debt going up and soybean faces a critical phase in the U.S.

China has been the biggest importer of the U.S. soybean, but now with the tariff war, it has stopped its purchase of the crop. Farmers in America are being affected by poor sales in their crop.

Chin has been growing poultry, beef, and pork. Now, its meat production has surged almost 250 percent from what it was in 1986 to the current production. But the animal feed has not improved in China. It depended on soybeans from the U.S. and Brazil for its animal feed.

The U.S. has been exporting soybean amounting to $21.4 billion, while Brazil has been exporting $25.7 billion worth of soybean to China in 2017. Soybean became the second-most valued export product to China.

But with the trade war, China has imposed 25 percent tariffs on the soybean imported from the U.S. The exports from the U.S to China on an average for three years were stated to be around 29 million metric tons soybeans. But with the trade war, the U.S. has exported only 5.9 million metric tons to China.

This is one of the reasons why China has chosen to place tariffs on soybeans first, to lobby the Trump administration. President Trump is, however, softening the blow by offering $28 billion as an aid to farmers.

However, the protectionist trade policy held by the U.S. is feared by economists, to cause another trade recession by the end of next year.

Reports from the National Association for Business Economics has stated that trade protectionism is causing a surge in recession fear in the economy.

The U.S. President has disrupted global trade, especially with countries like Europe, China, Mexico, and India.

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