Trade War – New European Commitment To Instantly Purchase US Soybeans

Realizing the importance of the French agricultural market, which is heavily protected, EU President Jean-Claude Juncker was quick to stress upon his return to Brussels that ‘no general agreement to buy US agricultural products’ was agreed upon, though he did admit having made an exception for a main export product for Iowa which had been hit hard by the recent Chinese trade war with the US: soybeans.

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">DYK? The value of Iowa’s soybean crop is estimated at about $5 billion? Our last farmers along the <a href="https://twitter.com/hashtag/RAGBRAI?src=hash&amp;ref_src=twsrc%5Etfw">#RAGBRAI</a> route are Robb Ewoldt and Dave Walton who — like many <a href="https://twitter.com/hashtag/IAsoybeans?src=hash&amp;ref_src=twsrc%5Etfw">#IAsoybeans</a> farmers — spend that revenue locally, helping support rural Iowa businesses and communities. <a href="https://t.co/eUhd6GyWr4">pic.twitter.com/eUhd6GyWr4</a></p>&mdash; Iowa Soybeans (@IowaSoybeans) <a href="https://twitter.com/IowaSoybeans/status/1023196877485817857?ref_src=twsrc%5Etfw">July 28, 2018</a></blockquote>

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Although market conditions were already pointing towards more purchases from European countries for this US agricultural product, US President Trump can rightly claim this as a victory. With the European Commission easing regulations for EU imports of US soybeans from Iowa, the farmers who feared losing out because of the White House’s tit-for-tat trade war with China can rest easily now that a 650 million people market will open all barriers for them.

US President Trump, during a recent stop in Iowa, stated clearly: “We just opened up Europe for you farmers. You’re not going to be too angry with Trump, I can tell you.”

The news comes on top of a $12 billion aid package agreed by the White House administration for soybean growers in the state (which is going to be a pivotal one in the upcoming midterm elections) and should thus cover the loss from decreased exports to China, which has been looking to Brazilian and Argentinean soybean producers instead.

Europe importers, however, decided that the quality of the US product is better and given the growing importance in the 28-member-state bloc of the vegetarian and vegan part of its population in the most developed countries (in Italy for instance the percentage of adults who consider themselves vegetarian nears 10%), this is a big deal indeed.

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Top 10 soybean yield/production <a href="https://twitter.com/hashtag/soybeans?src=hash&amp;ref_src=twsrc%5Etfw">#soybeans</a> <a href="https://twitter.com/hashtag/Soybean?src=hash&amp;ref_src=twsrc%5Etfw">#Soybean</a> <a href="https://twitter.com/hashtag/grain?src=hash&amp;ref_src=twsrc%5Etfw">#grain</a> <a href="https://twitter.com/hashtag/graincrops?src=hash&amp;ref_src=twsrc%5Etfw">#graincrops</a> <a href="https://twitter.com/hashtag/agriculture?src=hash&amp;ref_src=twsrc%5Etfw">#agriculture</a> <a href="https://twitter.com/hashtag/AgricultureNews?src=hash&amp;ref_src=twsrc%5Etfw">#AgricultureNews</a> <a href="https://twitter.com/hashtag/Agricultural?src=hash&amp;ref_src=twsrc%5Etfw">#Agricultural</a> <a href="https://twitter.com/hashtag/ag?src=hash&amp;ref_src=twsrc%5Etfw">#ag</a> <a href="https://twitter.com/hashtag/agchat?src=hash&amp;ref_src=twsrc%5Etfw">#agchat</a> <a href="https://twitter.com/hashtag/Farmers?src=hash&amp;ref_src=twsrc%5Etfw">#Farmers</a> <a href="https://twitter.com/hashtag/farmer?src=hash&amp;ref_src=twsrc%5Etfw">#farmer</a> <a href="https://t.co/iPiQIO2ero">pic.twitter.com/iPiQIO2ero</a></p>&mdash; Kevin Van Trump (@KevinVanTrump) <a href="https://twitter.com/KevinVanTrump/status/1022836451980005376?ref_src=twsrc%5Etfw">July 27, 2018</a></blockquote>

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The EU is currently the second largest global importer of soybeans after China.

Due to the political sensitivity of agricultural agreements in the EU, each state must normally agree before going into a global trade deal for the bloc. France, which has a big (and heavily subsidized) agricultural market which it desperately tries to protect, therefore hopes that the newly made soybean agreement with the US is not the start of further bad news for its farmers. For the time being though, the White House can indeed claim victory on Iowa’s behalf.

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">“He’s doing what we’ve asked him to do” — Dyersville soybean &amp; corn farmer Jeff Pape on President Trump’s trade efforts. Pape &amp; other farmers have been telling us, especially over the last wk, that POTUS has til end of year to come thru for them. Calls $12B aid pkg a “band aid.” <a href="https://t.co/WCPczIJzSr">pic.twitter.com/WCPczIJzSr</a></p>&mdash; Vaughn Hillyard (@VaughnHillyard) <a href="https://twitter.com/VaughnHillyard/status/1022583626855329792?ref_src=twsrc%5Etfw">July 26, 2018</a></blockquote>

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The EU also agreed to work towards buying more US gas after President Trump criticized Germany for being too dependent on Russia for its energy needs during his recent NATO visit in Belgium.