Soya chance

Soya bean, the new age staple, is caught in the US-China trade war. Can India augment its production and processing capacity to benefit?

The Sino-American trade spar over soya bean is an opportunity for India to improve its own production of the humble legume

THERE IS a strong possibility of a trade war as the two largest world economies flex their muscles. On March 2, US President Donald Trump levied hefty tariffs on aluminum and steel imports under Section 232 of the Trade Expansion Act that applies to national security. “If you don’t want to pay taxes, bring your plant to the US,” he announced standing amid industry workers in Washington. “Trump’s sanctions on imported steel could be a rare instance where the Republicans and Democrats agreed,” remarked Jim Cramer, host of business news channel cnbc.

Though Trump announced exemptions for Canada and Mexico, and said that the exceptions could also be made for other allies, many feel the real target of the tariffs—25 per cent on steel and 10 per cent on aluminium—is China, which produces half of the world’s steel and is often accused of dumping it on other markets, pushing down prices.

The tariffs are, in fact, in line with Trump’s 2016 election promise to protect the US industry. He had pledged to impose punitive tariffs of up to 45 per cent on Chinese goods in retaliation of the Asian giant undervaluing its own currency and disrespecting US copyright laws. After assuming office, he opened investigations under Section 232 in April last year to find out whether steel and aluminium imports violated national security interests.

This, observers say, irked China’s policymakers. In December 2017, they made it clear that retaliatory sanctions against the US effort to protect its industries would be imposed where it would hurt politically. It is reported that US farmers who export half of their soya bean produce to China have