U.S. and Chinese relations are tai-ed up in tension after House Speaker Nancy Pelosi visited Taiwan.
But, China is still buying U.S. ag products… for now.
Refresher: Since Pelosi’s Taiwan trip, China has purchased at least 262K tons of U.S. soybeans and 133K tons of U.S. corn. Worries over Chinese demand had caused steep soybean losses last week. But this week saw November soybeans up 28.75 cents after Tuesday’s close.
Despite the rising tension, China was still the top customer for U.S. food and ag exports—a full $2B ahead of Canada and Mexico, the next two top U.S. ag importers. In fact, China is on track to break last year’s record for American ag product purchases, and could potentially buy as much as $40B.
Soundbite: “We’re encouraging China to diversify and build up their own [grain] production,” said University of Missouri’s Ben Brown. “Right now, we’re playing this card of ‘you need us’; it might not be that far down the road that they don’t need us, at least not to the degree they do now.”
Looking ahead: Pelosi’s visit to Taiwan did result in a few Chinese missiles fired over Taiwan, plus trade curbs. But with the economic tai-es between Taiwan and China, China’s economic measures against Taiwan are unlikely to escalate or impact trade.