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Texas Farmers Unfazed By Pending Trade War With China

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Hundreds of millions of dollars in Texas agricultural products could be at stake if the U.S. enters into a trade war with China. But Texas Agriculture Commissioner Sid Miller said China’s threat of increased tariffs will ultimately benefit Texas farmers.

Miller believes China’s position on trade is nothing more than economic saber rattling.

“We’re at that stage where it’s just smack talk,” he said. “There’s going to be some of this. There’s going to be some short-term pain with some long-term gain because we are going to drastically increase our imports to China.”

Miller said some of that has already come true, and he points to new contracts between China and Texas beef and rice producers.

China in April threatened to raise its tariffs by 25 percent on soybeans, corn, pork and other commodities exported from the U.S.

According to the Department of Agriculture, 60 percent of soybeans grown in the U.S. are sold to China, and Texas soybean farmers, like Wade Cowan, are major contributors to that business relationship.

Cowan, though, is cautiously optimistic, because Texas soybean farmers won’t start harvesting until late summer or early fall. He said that should give trade negotiators plenty of time to work out their differences.

“So that is when most of those beans will move into the China market. The thing that spooks most people is the lack of sales right now,” Cowan said.

Cowan said if China temporarily backs away from its soybean trade with the U.S., there are other markets in Europe willing to purchase Texas soybeans.  

“As they level tariffs on us, the price of soybeans out of South America have increased, then the Europeans who weren’t buying our beans are starting to buy our beans because they don’t want to pay the higher price the Brazilians are asking,” Cowan said.

The Trump administration responded to China’s tariff increase by moving forward with its 25 percent tariff on $50 billion worth of Chinese goods.  

Ryan Poppe can be reached at rpoppe@tpr.org or on Twitter @RyanPoppe1