Soybean tariffs also could hit Mississippi River town economies

mississippi river barge
Louisiana could be the hardest-hit state from Chinese soybean tariffs because it is the gateway for exports — photo by Vicky Boyd

China is following through on its threat to implement a 25-percent tariff on U.S. soybean imports, affecting not only the farmers who grow the crop but also the transportation sector that exports it.

Half of the top 10 U.S. soybean-producing states are along the Mississippi River with Illinois, Iowa, Minnesota, Missouri and Arkansas ranking 1, 2, 3, 6 and 10. And agriculture is the third-largest economy on the river, generating $33 billion annually and directly supporting 192,000 jobs in the Mississippi River Valley alone, according to a news release from the Mississippi River Cities & Towns Initiative.

“My city resides just south of Baton Rouge where the port of southern Louisiana begins,” says Lionel Johnson, mayor of St. Gabriel, Louisiana, and initiative co-chair. “Louisiana is set to be the hardest-hit state from proposed tariffs overall with the vast majority of that impact coming from soybeans — not because we are a top soy-producing state but because we are the gateway port for that product to the rest of the world, and China is the largest destination. Twenty percent of all U.S. imports and exports pass through Louisiana ports,”

U.S. agricultural exports to China are critical to the Mississippi River economy, with exports of agricultural products to that country totaling $19.6 billion in 2017. That country is the second-largest ag export market overall for the United States.

China,  the largest international destination for U.S. soybeans, imported more than 27 million tons from the United States in 2017 — or 30 percent of all U.S. soybean production.

The United States is the world’s largest soybean producer, and China, the nation’s top soybean customer, purchased about $14 billion of U.S. soybeans in 2017, making this issue critical to soybean growers. On top of those numbers, farm markets have been soft in recent years.

John Heisdorffer, a soybean grower from Keota, Iowa, and president of American Soybean Association, expressed his concern, saying, “Our industry depends on trade with China. China imports roughly 30 percent of U.S. soybean exports, representing nearly one in three rows of harvested soybeans. We have spent more than 40 years building this market with China, and it is not a market U.S. soybean farmers can afford to lose.”

Mayors of the affected cities have vowed to work together to achieve improved trade outcomes for their constituents.

“Arkansas’ soy production along the Mississippi River mostly goes toward satisfying China export demand,” says Jay Hollowell, mayor of Helena-West Helena, Arkansas. “My state is also the largest soybean-producing state in the Lower Mississippi River Valley with the most production adjacent to the waterway. More than 20,000 jobs in my region are dependent on the soybean industry.

“Some of our farms export 100 percent of their soybeans. People’s livelihoods are on the line here. I would just like the administration to be clear, at least with us, on the goal. Is it to lower trade deficits with other countries like China, or is it to protect American industries? Can we have a conversation with the White House or the U.S. trade representative on where all this is going?”

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