Without trade pacts, there’s no ammunition when China doesn’t play fair

Barry Flinchbaugh warned us during the 2016 presidential race.

China, the longtime Kansas State University ag policy expert said back then, is a bully. When it comes to international trade, China will always do what is in its own best interest.

We’ve since learned that sometimes, China doesn’t play fair.

Earlier this month, China launched an anti-dumping probe into U.S. sorghum exports. According to the Washington Post, China’s commerce ministry believes the United States subsidized sorghum farmers, allowing them to sell to China at a loss. Grain traders in the country are expected to stop buying U.S. sorghum, to avoid tariffs.

Most pundits believe China’s actions came due to President Donald Trump hiking tariffs on solar panels and washing machines made in China.

No matter the reason, the inquiry from China hits sorghum growers squarely in the pocketbook. Immediately, prices for grain sorghum plummeted more than 55 cents.

China is a huge user of U.S. sorghum, importing some 190 million bushels each year. Put it this way: Three of every four rows of grain sorghum grown in this country—with a market value of more than $800 million—go to China.

Tim Lust, executive director of the National Sorghum Producers, disputes any claims of sorghum dumping. In a statement, he said: “U.S. sorghum farmers do not dump our products into China or elsewhere, and our products are not unfairly subsidized. A fair proceeding will demonstrate these facts.”

That would all be fine if China played fair. But it doesn’t. And that’s where Flinchbaugh’s foresight comes into play. He told growers at the Kansas Commodity Classic that the Trans-Pacific Partnership would have been the “…most lucrative trade agreement for farmers in my lifetime.”

Yet President Trump withdrew from the TPP just days after his inauguration. That pact is now being negotiated without the U.S. Successful negotiation of the TPP could be extremely lucrative for participating countries.

More than trade power, however, TPP would have held China accountable in a manner it is not accustomed to. According to Flinchbaugh, TPP member nations would be on equal footing to China, and able to flex their collective muscle. “There would be two powers, rather than just one bully,” he said. President Trump’s withdrawal of TPP, he added, “played right into China’s hands.”

So what’s next? China is expected to spend a year or so investigating its claims of sorghum dumping. In the meantime, sorghum exports to China continue, with business as usual as could be with two partners who don’t trust each other. However, the Washington Post warns that China will likely soon announce it will take anti-dumping action on U.S. soybeans, which would “…have a major psychological impact on the market and decrease prices for farmers.” If China represents a big market for U.S. sorghum, its appetite for U.S. soybeans is massive— last year China imported nearly 1.2 billion bushels—$14 billion worth—of our soybeans.

China has been the golden ticket for U.S. farmers for the last decade. It is by far the largest importer of several U.S. commodities, including corn, soybeans and sorghum. In all, exports account for 20 percent of all U.S. farm income, with China accounting for a major portion of that total.

It’s possible these trade kerfuffles will amount to nothing. But it’s also possible that other countries will fill a void for China’s business formerly occupied by the U.S. That would be bad news for us.

Bill Spiegel can be reached at 785-587-7796 or [email protected].