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The lowly soybean playing big role in foreign trade

By Jakob Kounkel
While the spat between General Motors (GM) and President Donald Trump dominates the national spotlight for tariffs costing the auto company hundreds of millions, a lesser-known commodity sits at the fulcrum of the trade war between the United States and China: the lowly soybean, one of the most prominent crops for McLeod County farmers.
Since Trump slapped a 25 percent tariff on Chinese goods in early July of this year, the per-bushel price of soybeans has taken a nosedive. More importantly, a chart in circulation from Deutsche Bank Research showed the United States has lost 98 percent of its export market for soybeans in China, which used to be the destination for around half of the America’s total soybean exports.
So, before Trump’s fiasco with China, the Asian country took in half the total amount of soybeans the United States exported around the world.
Now, America’s lost all but 2 percent of that market.
If you’re thinking: No problem, President Trump is doing what needs to be done to get fair prices for our farmers, who other countries have taken advantage of for decades. Fair enough. There’s merit to that claim.
Another claim to consider, and factual: As the United States tries to hand off hyper-expensive beans, China is going to countries like Brazil, another major soybean exporter, and has been investing in African agriculture for years in hopes of cheaper trade. As the United States forces China to veer to other countries for soybeans, we might find we’ve burned an agricultural bridge that won’t be rebuilt.
The United States Department of Agriculture predicted the amount of planted soybean acreage will drop by 6.6 million acres across America in 2019. Though not unprecedented, it marks one of the steepest declines in modern America over a calendar year in history.
Is President Trump making strides for the future of the everyday American farmer, while simultaneously being responsible for their demise? Or is Trump’s motivation nestled in his 2020 campaign?
It’s probably a mix of both, but the latter most likely reigns supreme over the former. To be fair, it’s hard to say of any first-term sitting president whether or not their policy was influenced by re-election or moral duty. Again, probably a mix of both.
Just two days ago, Trump touted the G-20 Summit as victory for American farmers and the auto industry, but neither his administration nor any other country have made such claims, and not because it was a win for us and a loss for other countries.
“Beans went up a nickel today, but we’ll have to wait and see what happens,” said Mark Hueser, self-proclaimed head-honcho at Hueser Grain in Glencoe -- a company that sells soybeans to China. “If (China) bought beans today, we would still pay a 25 percent tariff.” The trade war is on pause, but the tariffs are still very much in effect.
The new United States Mexico Canada Agreement (USMCA), taking the place of the North American Free Trade Agreement, is a leap in the right direction. A lot of farmers around rural Minnesota will tell you they’re just hoping for the best with the end result. Most just want it to be over.
One thing is certain: the lowly soybean is an imperatively important crop to the economy of Minnesota and its farmers. A lot of Trump’s policy has produced, with some help from former presidents, economic biomarkers that the country hasn’t seen in decades, if ever. Though it doesn’t seem like a good policy to tax your own citizens to get better deals for your citizens, it’s worked before, and it could work again.

(Jakob Kounkel is a staff writer for The Chronicle.)