Major Taiwanese news network Liberty Times Network (LTN) recently reported that the primary “weapon” China deployed in the trade war with the U.S. was China’s soybean tariff. China is the largest U.S. soybean buyer and the “punishment” was designed to have a negative effect on U.S. farmers, who mostly supported Trump in the last election. However, the significantly lowered price of U.S. soybean futures triggered a wave of non-Chinese buyers who even hoarded in volume. According to the U.S. Department of Agriculture, major U.S. soybean importers generated a year-over-year purchase increase of 27 percent for July-to-September U.S. soybean futures. These buyers include Mexico, Pakistan, and Thailand. Even Brazil, the world’s largest exporter of soybeans, is planning to buy more U.S. soybeans for domestic use and export Brazilian soybeans to China at a much higher price. Argentina, as the third largest soybean exporter, increased its purchase of U.S. soybeans due to domestic weather conditions.
Source: LTN, July 12, 2018