US, China tariffs talk threatens Arkansas soybean industry

LITTLE ROCK — President Donald Trump’s plans to place tariffs on more Chinese goods are worsening Arkansas’ soybean industry, according to farmers.

Trump announced Monday that he’d place 10 percent tariffs on another $200 billion in Chinese goods bought in the U.S., the Arkansas Democrat-Gazette reported.

Trump’s threat and China’s promise to retaliate has almost immediately affected soybean prices, which slumped to $8.89 a bushel at closing Tuesday, said Randy Veach, president of the Arkansas Farm Bureau.

“We’re getting to a point now that it’s going to be very difficult for a farmer to make a profit, with prices down, (expenses) up and an increase in prices for everything else,” Veach said. “Now we have tariff wars at a time prices are very fragile.”

Arkansas farmers harvested 3.5 million acres of soybeans last year, collecting 178.5 million bushels, according to the U.S. Department of Agriculture. The crop had a market value of $1.74 billion at $9.75 a bushel, placing Arkansas 11th among soybean-producing states. The state exports about 40 percent of its soybeans, most going to China.

Economists with the University of Arkansas System’s Agriculture Division said earlier this spring that China’s threatened 25 percent tariff on soybeans and seed oils would cost the state $243.6 million. The same tariffs on grains and cotton would cost the state $191 million and $51.7

million respectively.

Veach said farm groups like his are working with Congress to lessen the trade tension.

“I don’t think all of this is set in stone,” he said. “I do think they’re battling back and forth right now. The president is adamant, and China can be very set in what they’re trying to accomplish. It’s hard to say where this thing will end up.”