Trump and China: Will American agri interests abroad overcome trade protectionism?

In September 2016, Peter Navarro and Wilbur Ross, both of whom have since obtained major trade policy positions in the Trump administration, published a document called ‘Scoring the Trump Economic Plan’ that explains Trump's stand on global trade. In a nut-shell, the US is the largest economy in the world and therefore should be able to press for more leverage with its trade partners. Peter Navarro has now been appointed the head of the new National Trade Council and Wilbur Ross is the Commerce Secretary.

Implementing this vision, Trump might push to renegotiate existing trade deals to get better outcomes for the US. Trump has already scrapped the US involvement in the Trans-Pacific Partnership (TPP). Besides taking a hard stance against global free trade, the Trump administration now also hails its supporters with strongly negative views on China-US trade matters. Peter Navarro is well known for his anti-China views, written down in his book “Death by China”, and Wilbur Ross has repeatedly accused China of resorting to ‘malicious trading tactics’. Put together, this does not provide a positive outlook for the future of China/US trade relations.

Agriculture and trade
Agricultural trade, however, might prove a different game. The US and China have been major agriculture trade partners for the past few decades. The US is the world’s largest agriculture exporter and China is one of the country’s main export markets. Regarding agriculture, the US boasts a trade surplus. Between 2000 and 2015, US agriculture exports to China increased ten times. According to the website of the US Department of Agriculture (USDA): ‘With the productivity of U.S. agriculture growing faster than domestic food and fiber demand, U.S. farmers and agricultural firms rely heavily on export markets to sustain prices and revenues’.

So who, in this overall China hostile government, are the people that will define the US agriculture policy towards China? Two major names are Sonny Perdue, the newly appointed Minister of Agriculture, and Terry Brandstad, the US ambassador to China.

Both have historic ties with China. Sonny Perdue visited China several times when he was the Governor of Georgia between 2003 and 2011. He opened his state’s first international trade office in Beijing and actively supported commerce between Georgia and China. Terry Brandstad is said to be ‘an old friend’ of Chinese president Xi Jinping, whom he has known for over 30 years from the president’s early trips as a bureaucrat to Iowa studying agricultural practices. As a governor for Iowa, Brandstad saw China as a major market for its produce exports. He tried to achieve this whilst refraining from criticizing Chinese imports into the State - back then he was not in line with fellow Republicans.

Last week, over a hundred agriculture companies sent a signed letter to Trump, pleading for the importance of international cooperation and trade for US agriculture and trade exports. Those that signed the letter include the US Apple Association, the California Fresh Fruit Association, the California Cherry Export Association and the Fresh Produce Association of the Americas.

Trump’s twists and turns seem hard to predict. However, perhaps for agriculture and the fresh produce industry, clear US interests abroad and the support of two senior members of the Trump Administration who are not, per se, hostile to China, might create room for less protectionism and more trade.