The Presidents Trump and Xi met in person during the first term of the US president, but they do not yet do so in his second. This should change later this month.
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The rescue of the US soybean industry could be much more expensive than $ 10 billion in $ 14 billion floating by Trump’s administration.
One factor could change this: President Trump could persuade the president of the Chinese Xi Jinping to buy us soybeans if and when they have the first personal meeting of his second term in a forum in South Korea later this month.
This probability, the US Census Bureau data makes a fairly imperative case for greater expense than proposed. This is due to the fact that the evidence suggests that payments this time would be greater than two year payments to soy farmers and others who started in 2018, shortly after the start of Trump, which focused exclusively on the US trade deficit with China and the payments that were then accelerated in 2019.
Interestingly, in the summer of 2018, US soy exports increased by 7.64%, shortly before the peak era of October to January. This profit would be bigger, but China had already slowed its market leading to peak season, with a total of July below 26.82%, according to my analysis of the latest data from the US Census Bureau.
This year is different. US soy exports are not up as it was in 2018, but below 23.05% to July. The percentage decline in China this year, at 51.52%, is almost twice that of 2018%.
How much more can it cost, this time? This is not yet clear, of course.
In addition to meeting Trump with XI, this is because it is not clear how much of the $ 24 billion paid to all farmers in 2018 and 2019 through Special Market Facility Program I went to soy farmers. The percentage was probably about 75% -80% of the total.
What makes the image particularly serious and what makes an encounter with the XI more critical is that China has not, for the first time, have been putting so much for us soy for the first time, as I wrote earlier.
In addition, Brazil, the second largest producer in the world behind the United States, has supplied Up to 95% of China’s needs for the original season. Brazil’s peak season is about a mirror of the United States since it is in the southern hemisphere.
A premature signal from the Chinese came in June and then in July, when there were no exports to China – the first time China did not buy soy for two consecutive months in two decades and a 51.52%decline.
Of course, the value of summer exports is generally meager compared to the months of October to January. That is why there are no orders for the peak season is not a big deal.
In fact, by January, exports had exceeded $ 1 billion for 54 of the last 62 “peak” months, with seven of those eight months dating from Trump’s first term. And there lies the danger with the size of the rescue that will be required.
One of these eight months was in November 2018, when the whole fell to zero, the only time it happened in a month of the peak season. Next month, the total was just $ 24.25 million, equal to 1.73% of all US soy exports. Traditionally, China represents more than 50%, sometimes as much as the 70s.
China represented 51.94% of US soy exports in 2024, the last whole year. In June and July this year, the whole was zero.
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The Chinese seem to mark, without purchases in June and July-August data are scheduled for liberation next Tuesday-and no mandate they are going through, that it will try to put more pressure on the United States and President Trump to reduce the US-threatened prices after the US-based period.
While the United States invoices for China were and are broad and extensive-priced-implemented by Trump during his first term and are largely maintained by his successor, President Joe Biden-Chinese mutual invoices were more strategically and surgical.
Most of the states affected by the lack of soy exports to China are states that voted for Trump and the states that received the largest payments in 2018 and 2019: Farmers in Iowa, Illinois, Minnesota, Kansas, Nebraska, Nebraska, Texas Ohio received at least one billion dollars.
The further composition of the situation, in addition to the lack of summer markets and orders for peak times, is that US soybean farmers are driving a bumper cultivation this year.
While there are several factors that show a larger rescue for soy farmers than in 2018, including the data, Trump has the opportunity to encourage some of the sales of soybean season to save what is being shaped to be a historically harsh year for us.
