A new report from Bloomberg shows US soybean exports to China collapsed in 1H19 to the lowest level in more than a decade.
The US exported 614,806 tons of soybeans to China in June, according to US customs data. That brought 1H19 China imports of soybeans from the US to 5.9 million tons, the lowest level since 2004, according to Bloomberg calculations.
US farmers, who harvest soybeans from September to November, have been some of the hardest hit in the trade war as Chinese buyers shift to Latin American markets for agricultural products.
Senior US officials met in China on Wednesday with the hopes of resolving trade disputes that could result in more agriculture trade between the two countries.
But the US trade delegation broke off discussions with its Chinese counterparts on early Wednesday morning and is already on its way back to Washington, a sign that no new progress was made, and that China is not likely to buy significant amounts of US agriculture products this summer.
According to Bloomberg, US delegates including Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer wrapped up talks with Vice Premier Liu He and their other Chinese counterparts on Wednesday afternoon at the Xijiao State Guest Hotel in Shanghai, according to a pool report.
The latest round of talks took place against a jarring backdrop following a fresh outburst by Trump on Twitter, who, as delegates gathered Tuesday, slammed China's unwillingness to buy American agricultural products and said it continues to "rip off" the US.
...to ripoff the USA, even bigger and better than ever before. The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now...or no deal at all. We have all the cards, our past leaders never got it!— Donald J. Trump (@realDonaldTrump) July 30, 2019
What's worse, the talks were supposed to focus on "goodwill" gestures, like the agricultural purchases promised by China, and the rollback of sanctions on Huawei promised by Trump. This could be devastating for US farmers as China is going to continue sourcing soybeans from Latin America, not the US, in 2H19.
Since the start of the trade war, most of China's soybeans have come from Brazil. Last year, the bulk of the country's 80 million ton export went to China, replacing market share that was once controlled by US farmers.
The Global Times on Wednesday morning said if Washington still holds the illusion that Beijing will somehow cave in and compromise on issues concerning sovereignty, "then no deal is fine."
The Trump administration prepared for a no-deal week with the unveiling of a $16 billion farm bailout several weeks ago, that is expected to greatly benefit the wealthiest of US farmers while not providing adequate financial support for smaller ones.
With the election coming up, there's a high probability since the trade talks collapsed Wednesday that China could abandon US agriculture markets for Brazil, Argentina, and Paraguay, which could certainly lead to increased financial hardships for President Trump's base, the American farmer, located across the Midwest US.