FOR ESSAYS GURU ONLY 93A

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  The first topic that strikes my interest for this week’s topic is the trade agreements going on with China currently.  I come from a farming family so the tariffs and trade agreements with China effect my family’s livelihood. Recently the political tension between China and the US has escalated and each country has imposed tariffs on goods traded between each country.  This directly affect the US farmers.  “The Asian nation, the largest buyer of American sorghum, has responded with tariffs of its own” (Good, 2018).  These issues will continue to affect the farmer and even though it’s just started it’s already having a negative effect.  “At least two ships loaded with sorghum have changed course while sailing across the Indian Ocean after China imposed the hefty tariff on U.S. supplies this week” (Good, 2018).  With these changes the sorghum market will enter into a surplus with no place to move the product and in turn will drive the prices down.  “It won’t be easy replacing the Chinese market.  Last year, Chinese buyers purchased more than 90 percent of the 245 million bushels of sorghum America exported” (Good, 2018).  These tariffs aren’t effecting the sorghum market.   The soybean market with China is under attack as well. “Beijing responded to US penalties on Chinese goods with a punitive 25 per cent tariffs on US soybeans” (Zheng, 2018).  These tariffs will take away any margin the farmer is going to have to make a profit.   Part of the reason China targeted soybeans is its one of the biggest exports that US has with China.  “Given that the crop is the highest valued US export to China, worth $14 billion annually” (Zheng, 2018).  Now that the tariff is in place the American farmer is more than a little worried about the future for their farmers.  Most farmers only survive with a slim margin and if they can’t move their crops or there is an additional cost many farmers may be going out of business.  My hope is the trade agreements get worked out and both countries back off a little.  These trade talks can be tied into chapter 8 and the discussions on doing business with Cuba.  

The second topic ties directly to the first one.  This is the trade agreement between Canada, Mexico and the United States.  This agreement created NAFTA.   The importance of this trade agreement can be tied into agriculture and specifically soybeans.  “In 2015, the U.S. exported $438 million and $2.44 billion of soy products to Canada and Mexico, respectively” (NAFTA, N.D.)   This trade will no doubt increase with the issues that have developed from the tariffs in China.  This means that the US farmer will have someplace to offload some of their surplus from not trading with China.  Now there is only so much that Canada and Mexico can purchase because they only have so much need but it will help.  “In 2016, Us agricultural imports from Canada totaled $24.9 billion while US exports amounted to $25.3 billion” (Pouliot, 2018).  Overall the NAFTA agreement will critical for the next year or two until relations with China improve hopefully.  The subject of NAFTA ties back to module 3 when we talked about it but I never really looked at the agriculture side until now.  References  Good, K. (2018) Ag Trade: Issues with China Escalate – Closer Look at Sorghum, Soybeans.  Retrieved    From: https://agfax.com/2018/04/23/ag-trade-issues-with-china-escalate-closer-look-at-        sorghum-soybeans/  NAFTA. (N.D.) Industry Facts.  Retrieved From:                  https://naftafoodandag.org/facts/     Pouliot, S. (2018) The Importance of NAFTA for the Agricultural Sector.  Retrieved From:                  https://www.card.iastate.edu/ag_policy_review/article/?a=73     Zheng, S. (2018) Donald Trump faces farmers’ wrath as China’s tariffs put US soybean exports at risk.  Retrieved From: http://www.scmp.com/news/china/article/2140340/donald-trump-faces-             farmers-wrath-chinas-tariffs-put-us-soybean-exports