OUR VIEW: China trade deal offers hope for Illinois farmers
OUR VIEW

OUR VIEW: China trade deal offers hope for Illinois farmers

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Consider it a soybean détente.

The initial U.S.-China trade deal finalized Wednesday hopes to put on ice what had been growing hostilities that somehow drew Illinois farmers into a spat among the world's two biggest economies.

In a nutshell, it started when the Trump administration pushed back against China on unfair trade practices, manipulation of currency and companies stealing technology and intellectual property from the states.

The result was 25% levies put on $34 billion of Chinese imports, from grains to tobacco to whisky to steel, in summer 2018. Retaliatory tariffs followed.

Soybeans fit into this mess because the legumes are the single largest American export to China. And the No. 1 U.S. producer of soybeans is Illinois.

For farmers, the trade war produced uncertainty and lower prices. The good news is that strain is mostly alleviated in the new deal, with a few caveats.

On the encouraging side is that the Chinese have agreed to increase soybean and agricultural imports by $40 billion and another $160 billion in other sectors. The U.S. won't add certain tariffs to Chinese goods like toys, clothes and electronics and promised to scale back tariffs in other areas.

This is also important to the Illinois pork industry and corn-growers, two other key segments of the regional economy.

There also were important steps in delivering a level of protection for technology, as well as addressing ongoing bad trade practices. President Donald Trump during a White House bill-signing event termed it "a sea change in international trade."

Now the catch: The export boost is for two years and entirely predicated on China's ability to follow through with promises. The earlier negotiation process caused tremendous turbulence and forced the federal government to escalate financial assistance for producers.

Secondly, this arrangement is actually just the first phase of a much more complex discussion about China re-configuring its economy. That process will be lengthy, which means farmers remain in limbo.

We hope both sides keep their word.

The agreement Wednesday does suggest we're in for a period calm in what had been a period of ever-increasing tariff talk. With the threat of a recession on the horizon, we need this period of adjustment.

We hope both sides follow through. As we’ve said before, we’re concerned about local farmers being caught up in a trade war. But there’s no doubt improved international trade relations mean an improved economy for Central Illinois.

We’ll have to wait to see how this plays out.

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