Chinese tariffs on U.S. soybeans will cause global disruption, says Soy Canada

Canada's farm economy may feel a pinch with China's tariffs on U.S.

Canada's soybean producers say China's expanded list of tariffs to be applied on U.S. products will cause global disruptions and uncertainty.

China retaliated Wednesday against U.S. plans to apply tariffs on 106 imports by issuing a US$50-billion list of U.S. goods including soybeans, whisky, beef, industrial chemicals and small aircraft for possible tariff hikes in the escalating dispute.

Soy Canada executive director Ron Davidson says the 25% levy on U.S. goods could create some opportunities for Canadian exporters, but also force Canada to defend sales to 69 other countries.

Canada sold nearly five million tonnes of soybeans valued at $2.7 billion to China last year.

It is the country's largest export market, but Canada is a small player compared with global leaders like Brazil, the United States and Argentina.

Brazil supplied about half of the nearly 100 million tonnes of soybean imported by China last year. The U.S. shipped some 33 million tonnes.

Davidson says replacing U.S. soybeans will be challenging and Canada doesn't have the extra volume even though it is the fastest growing field crop in the country.

U.S. producers looking to replace their exports to China could sell more soybeans in Canada and other countries, displacing Canadian soybeans.

The price and volume of Canadian exports to China may increase a bit, but the price could fall in the domestic market and other markets, Davidson says.

That translates into "substantive instability in the world market."

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