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Ag is sole bright spot in Sino-U.S. trade

So far this year, U.S. exports to China are running at 2021’s level and there is little reason to expect improvement in the near term, said analyst Chad Bown of the Peterson Institute for International Economics on Monday. “While agriculture overall remains a U.S. export bright spot in 2022, products like pork, wheat, and corn face new worries,” he wrote.

Farm exports “remain the most positive performer,” outshining energy or manufacturing, with sales running 16% above 2021’s pace, said Bown. Much of the increase is the result of higher commodity prices rather than larger tonnage. Soybeans, cotton and sorghum recorded the largest increases in sales. “Pork, corn and wheat have performed poorly this year.” China has rebuilt its hog herd since an epidemic of African swine fever, so it is importing less pork.

“The future of U.S.-China trade in farm products is uncertain,” wrote Bown, pointing to concerns held by U.S. trade representative Katherine Tai about the potential vulnerability stemming from reliance on China as a customer. Beijing buys nearly $1 or every $5 of U.S. ag exports and U.S. ag exports suffered when China put high tariffs on them during the trade war.

“Food trade may evolve like energy has, as policymakers base relationships on perceived vulnerabilities to national security,” said Bown. “Yet food is different. Reorganizing food supplies and food trade along the lines of geopolitical blocs is likely to reduce food security globally.”

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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