China-US Trade War Reshapes Global Agricultural Markets

Why in the News?

China has reduced agricultural imports from the US, focusing on self-sufficiency and diversifying suppliers. This shift may pressure India to open its market to US farm produce amid changing global trade dynamics.

Escalation of Trade War :

  • The US imposed a 25% tariff on imports from China, with no exemptions, unlike Canada and Mexico.
  • In retaliation, China levied additional tariffs (10-15%) on key US agricultural products, including soybeans, beef, dairy, and wheat.
  • These tariffs have significantly impacted US farmers, especially in the Midwest and Southern cotton-growing regions.

China’s Shift in Agricultural Strategy

  • China has adopted a self-reliance strategy by increasing domestic production and reducing dependence on imports.
  • The government aims to boost grain production from 694 million to 767 million tonnes by 2032 while cutting imports.
  • COFCO and Sinograin, two state-owned giants, have been securing alternative suppliers, shifting focus to Brazil and Argentina for key imports.
  • US soybean exports to China dropped from 30% (2017-18) to 5% (2023-24), while Brazil’s share increased.

Potential Pressure on India

  • The US may push India to open its market for American agricultural products due to China’s reduced reliance.
  • India, like China, focuses on self-sufficiency in agriculture, aligning with its Atmanirbhar Bharat
  • The situation could influence India’s trade policies, requiring careful negotiations to balance domestic interests and international trade obligations.