By: Azhar Azam
*This is one of my opinion pieces (unedited) that first appeared at "China Global Television Network (CGTN)":
https://news.cgtn.com/news/2019-08-07/The-blame-is-on-Trump-for-U-S-soybean-farmers-angst-and-unrest-IYcyCOSWOc/index.html
On Tuesday, China’s central bank deeply regretted US Treasury Department’s determination to designate Beijing as a “currency manipulator”, accentuating the label does not meet the quantitative standards of the so-called “currency manipulator. The statement also subbed the US act “a wayward unilateral and protectionist behavior”.
In its press release, the US Treasury Department has earlier said that Secretary Steven T. Mnuchin would take up the issue to International Monetary Fund (IMF) “to eliminate the unfair competitive advantage created by China’s latest actions.”
Interestingly, the Trump administration would approach an international financial watchdog which has recently stated that the Chinese RNB/Yuan exchange rate is generally in lines with the fundamentals.
While deliberately discounting the fact that Chinese Renminbi is the strongest currency in G-20 countries that has witnessed considerable appreciations over the years – Trump’s deplorable actions towards China intuit that he is craving to inflame pressure on Beijing by expanding trade war into other portfolios such as forex and financial markets.
Trump administering fails to comprehend that Yuan deflation would not necessarily increase China’s exports; instead such irrepressible episodes could lead Chinese capital outflows to panic and import costs to soar as well as could threaten country’s financial stability.
The latest move textured after last week the US President Donald Trump popped up on twitter and announced that he would whack 10% tariffs on remaining $300 billion of Chinese goods while asserting that Beijing is not buying large quantities of US agriculture produce, soybeans being the largest.
Maybe Trump’s newer verdict was based on an archaic trade data. Earlier this year when China-US trade war was at full boom, Chinese soybeans imports from US had plummeted by a whopping 70.6% to 4.3 million tons for the first four months (January to April) of 2018.
But immediately after Trump and Xi agreed to play down trade frictions at G-20 summit in Osaka, China honored its pledge and bought about 2.3 million tons of US soybeans whereas another 2 million tons of US soybean shipments would reach China in August.
According to Chinese state planner National Development and Reform Commission (NDRC), Beijing has imported 130,000 tons of soybeans, 120,000 tons of sorghum, 60,000 tons of wheat and 65,000 tons of cotton and other products from July 19 to August 2 from the US.
So Trump’s claim about China not importing US agriculture products in bulk is doomed to absurd and irrational. In fact, the US president is putting lame excuses to vindicate his baseless farm produce accusation that is followed by his unsubstantiated currency manipulation charges on China.
US unremitting provocative measures invite China’s ire. Hence in response to Trump’s trade crusade, on Monday China said that it would not rule out the possibility to levy additional tariffs on US agriculture imports. As a result, the Chinese companies have halted their imports of US agriculture produce from August 3.
Trump’s incessant and hot trade manipulation tactics have hard-pressed China to find some reliable soybean and other agriculture produce suppliers other than the US. During Chinese President Xi Jinping’s visit to the Kremlin in June, China and Russia signed a comprehensive strategic partnership of coordination in a new era including a Development Plan on Deepening China-Russian Cooperation in Soybeans.
Beijing is the world’s largest buyer of soybeans and consumes about 110 million tons of soybeans against domestic production of just 16 million tons. In a blow to the US farmers, Chinese farmers would now grow soybean in Russia to send back home and to meet massive domestic consumption.
China’s General Administration of Customs (GAC) is thoroughly facilitating the consensus reached by Chinese and Russian president and has now allowed soybean imports from all over Russia – expanding prior imports from just five Russian regions bordering China. According to a report by Chinese agriculture department, a total of 28 Chinese soybean companies have invested in outside China - Russia being the largest with 20 companies.
While China is only taking preventive measures to look out for sustainable farm produce suppliers, the US soybean and other farmers should only blame their president for the unrest and angst among them and that has slashed US agriculture exports from $19.5 billion in 2017 to $9.1 billion in 2018.
*This is one of my opinion pieces (unedited) that first appeared at "China Global Television Network (CGTN)":
https://news.cgtn.com/news/2019-08-07/The-blame-is-on-Trump-for-U-S-soybean-farmers-angst-and-unrest-IYcyCOSWOc/index.html
On Tuesday, China’s central bank deeply regretted US Treasury Department’s determination to designate Beijing as a “currency manipulator”, accentuating the label does not meet the quantitative standards of the so-called “currency manipulator. The statement also subbed the US act “a wayward unilateral and protectionist behavior”.
In its press release, the US Treasury Department has earlier said that Secretary Steven T. Mnuchin would take up the issue to International Monetary Fund (IMF) “to eliminate the unfair competitive advantage created by China’s latest actions.”
Interestingly, the Trump administration would approach an international financial watchdog which has recently stated that the Chinese RNB/Yuan exchange rate is generally in lines with the fundamentals.
While deliberately discounting the fact that Chinese Renminbi is the strongest currency in G-20 countries that has witnessed considerable appreciations over the years – Trump’s deplorable actions towards China intuit that he is craving to inflame pressure on Beijing by expanding trade war into other portfolios such as forex and financial markets.
Trump administering fails to comprehend that Yuan deflation would not necessarily increase China’s exports; instead such irrepressible episodes could lead Chinese capital outflows to panic and import costs to soar as well as could threaten country’s financial stability.
The latest move textured after last week the US President Donald Trump popped up on twitter and announced that he would whack 10% tariffs on remaining $300 billion of Chinese goods while asserting that Beijing is not buying large quantities of US agriculture produce, soybeans being the largest.
Maybe Trump’s newer verdict was based on an archaic trade data. Earlier this year when China-US trade war was at full boom, Chinese soybeans imports from US had plummeted by a whopping 70.6% to 4.3 million tons for the first four months (January to April) of 2018.
But immediately after Trump and Xi agreed to play down trade frictions at G-20 summit in Osaka, China honored its pledge and bought about 2.3 million tons of US soybeans whereas another 2 million tons of US soybean shipments would reach China in August.
According to Chinese state planner National Development and Reform Commission (NDRC), Beijing has imported 130,000 tons of soybeans, 120,000 tons of sorghum, 60,000 tons of wheat and 65,000 tons of cotton and other products from July 19 to August 2 from the US.
So Trump’s claim about China not importing US agriculture products in bulk is doomed to absurd and irrational. In fact, the US president is putting lame excuses to vindicate his baseless farm produce accusation that is followed by his unsubstantiated currency manipulation charges on China.
US unremitting provocative measures invite China’s ire. Hence in response to Trump’s trade crusade, on Monday China said that it would not rule out the possibility to levy additional tariffs on US agriculture imports. As a result, the Chinese companies have halted their imports of US agriculture produce from August 3.
Trump’s incessant and hot trade manipulation tactics have hard-pressed China to find some reliable soybean and other agriculture produce suppliers other than the US. During Chinese President Xi Jinping’s visit to the Kremlin in June, China and Russia signed a comprehensive strategic partnership of coordination in a new era including a Development Plan on Deepening China-Russian Cooperation in Soybeans.
Beijing is the world’s largest buyer of soybeans and consumes about 110 million tons of soybeans against domestic production of just 16 million tons. In a blow to the US farmers, Chinese farmers would now grow soybean in Russia to send back home and to meet massive domestic consumption.
China’s General Administration of Customs (GAC) is thoroughly facilitating the consensus reached by Chinese and Russian president and has now allowed soybean imports from all over Russia – expanding prior imports from just five Russian regions bordering China. According to a report by Chinese agriculture department, a total of 28 Chinese soybean companies have invested in outside China - Russia being the largest with 20 companies.
While China is only taking preventive measures to look out for sustainable farm produce suppliers, the US soybean and other farmers should only blame their president for the unrest and angst among them and that has slashed US agriculture exports from $19.5 billion in 2017 to $9.1 billion in 2018.