Ag Policy Blog

China remains in the crosshairs of U.S. presidential candidates, which could impact exports of farm commodities and net farm income for producers much like former President Donald Trump's trade war with China.

Florida Gov. Ron DeSantis, trying to jumpstart his campaign against Trump, laid out some economic policies on Monday in New Hampshire, which includes taking tougher stands against China.

DeSantis called for revoking normal trade relations with China, which would take an act of Congress but then would change tariff rates and import requirements for Chinese goods.

"The Chinese Communist Party continues to eat this country's lunch every single day," DeSantis said.

DeSantis and other GOP candidates have reiterated calls for tougher policies against China, using terms such as "decoupling."

When Trump was in office, he sought to get better trade terms with China though a series of tariffs -- many of which remain in place on Chinese products. Farmers may recall China reciprocated by essentially culling back on U.S. agricultural exports. Former Agriculture Secretary Sonny Perdue used the Commodity Credit Corp. to spend $23 billion in 2018 and 2019 on what became the Market Facilitation Program (MFP).

Farmers found themselves relying heavily on those MFP payments as net farm income largely remained in a slump.

Candidates are looking to get tougher on China, but they are not talking much about farm policy and the impacts of raising the trade stakes with China again.

Following Trump's trade deal with China signed in early 2020, China remains the top export destination for U.S. agriculture, buying $38.1 billion in products in 2022. China's soybean purchases for the full year in 2022 hit $17.9 billion in value.

Through May, China bought nearly $12.9 billion in U.S. agricultural products, down from $14.2 billion for the first five months of 2022, according to U.S. trade data.

At just under $7 billion, soybeans account for more than half of China's agricultural purchases from the U.S. so far in 2023, up $2 billion from soybean purchase for the first five months of 2022.

With one month left in the USDA marketing year, China has about 31.1 mmt (1.4 billion bushels) of soybeans.

In 2018 when the trade war was peaking between China and the U.S., China bought just $3.1 billion in soybeans. That bumped up to $8 billion in 2019.

China also has gotten back into the pork market a little stronger this year, buying 1.33 mmt of pork, a distant second behind Mexico, but sales to China are slightly higher in volume than sales to Japan, according to USDA.

Republican presidential candidates are also set to spend more time in Iowa in the coming weeks with fundraisers for members of Congress and the Iowa State Fair. At the fair, candidates will both hold soapbox speeches on the concourse as well as take part in "fair side" chats with Iowa Gov. Kim Reynolds.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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