The Great Soybean War

us china trade war

Donald Trump is a great believer in the use of force to change things.  Regretfully, he does not understand either the nature of force or of change.    The nature of force is explained by Newton’s third law of motion which states that as forces exist in pairs, as one exerts force on the other, the second object in turn exerts an equal and opposite force on the first.  Second, he fails to grasp the most basic law of modern physics  which is that all dimensions of reality are internally related.Einstein revolutionized physics by showing that Newtonian view of the universe which saw planets existing separately in empty ether and interrelating to one another as separate entities was incorrect. Rather, the structure of the universe is an internally related and unified whole.  Thus, the size and density of matter shape space, and gravity is the result of this.  So it is that  gravity bends space and slows time.  As a result of the internal relatedness of all things,  a change in ANY dimension of reality produces a change in the others and hence, a change in the totality.

Because Trump does not understand these two basic physical principles, he does not understand that the force he exerts on others will not move them in the direction he wishes them to move but will rather produce opposite reactions.  It will cause them to resist rather than conform to his wishes.  Because he sees the nations of the world as independent bodies which merely interrelate, he does not understand that the world is internally related and so that a change in one produces a change in others and so in the totality in which America partakes.  Thus, he imposes sanctions and tariffs not understanding that rather than compliance they bring about resistance.  Rather than sanctions and tariffs benefiting his country, they can harm it.  Moreover, the results of the economic force he applies to individual nations does not merely affect the nations individually, but rather change and alter the economic relations of all nations producing both positive and negative changes simultaneously.

The truth of the laws of physics are brought home to us if we examine the responses of those nations who have had great economic force applied to them to control them: Russia and  China.

Russia:  Russia’s reaction to the first round of sanctions imposed on it by the EU in 2014 (when Obama not Trump was president)  in response to its absorption of Crimea,  was to impose its own sanctions on EU agricultural products imported into Russia.  In 2013 EU agricultural exports to Russia were worth 11.3 billion Euros.  As Russia did not ban all EU food imports, but only certain products, the amount of money lost was approximately half of that 11.3 billion Euros;in the scheme of things, not very much money at all.  The effect of Putin’s sanctions on the EU was minimal, but the positive benefits to Russia which it produced was huge.   Russia’s agricultural sector exploded contributing directly both to the nation’s GDP and its food security.  Putin had used the sanctions to a strategic advantage.

According to Russia’s state statistics service, Russian companies produced 17.5 percent more beef, 30.6 percent more pork, and 11.9 percent more poultry in just the three years after Putin imposed sanctions on the EU.  Frozen vegetables increased by 31.6 percent, milk  by 5.8 percent and cheese 20.2 percent.     The growth of Russian agricultural has allowed Russia to achieve “full self-sufficiency when it comes to food” and contributed to the GDP of the nation.  ”

The strong growth in Russia’s agricultural sector has in turn, stimulated the growth of EU companies producing agri-related products such as plant growing and food processing equipment and heavy duty machinery such as tractors and harvesters.  In a typical action/reaction scenario, Russia’s growth has stimulated EU growth.  Also, the possibility for further growth of Russian agriculture lies in Asia in general and China in particular.  Please keep in mind as you read that Russia has a band of rich land along its border with China that is perfect for growing soybeans.

China,Trump’s misunderstanding of the basic laws of change and motion are glaringly obvious in its relationship with China.  First, in so far as he tends to overlook the negative effects of his tariffs on the American people, and second, in so far as he does not consider how these tariffs would benefit rather than hurt other nations.

One of President Trump’s biggest grievances with China is America’s bilateral trade deficit which accounts for 85% of America’s total current account deficit.  Ignoring the fact that the trade imbalance is the natural result of global supply-chain evolution,  Trump tried to force China to commit to correcting this trade imbalance by purchasing more American goods.China responded to this concern nearly immediately by agreeing to purchase large amounts of America soybeans.

But there were other demands that China would not cave into, and Trump’s response was to raise the 10% tariffs that had been levied on the US$200 billion worth of goods made in China to 25%.  Trade and business groups immediately understood that Trump’s actions would have disastrous results for the American people.  American companies from those in the fashion industry to exporters of agricultural products such as dairy, blueberries, whisky, wine and yes….soybeans would be devastated by the tariffs.  Not only would businesses suffer the tariffs were the equivalent of raising taxes on millions of American families.

On hearing of the raise in tariffs Beijing said it “will have no choice but to implement countermeasures”  One countermeasure would be to stop purchasing American soybeans. Since 2010 China  has been the largest buyer of US soybeans which rank just behind corn as America’s biggest agricultural product.  Should China cease purchasing soybeans their price would immediately become depressed and unsold stocks would increase before the 2019 harvest begins in September.  Beijing has already imposed tariffs of 25% on US soybeans.

Moreover, not only would China’s tariff on soybeans have a negative effect on American farmers, it would have a direct negative effect on Trump himself.  Soy is grown mostly in the Midwestern states that make up Trump’s electoral support. . Overall, about 30 states produce soybeans, mostly east of a line from North Dakota to Texas.

China’s demand for soybeans was approximately 5 million tons less that the world’s total soybean exports in 2014.  In 2015 China imported more soybeans than the rest of the world combined.As demand for soybeans inevitably continues to rise in China as well as in America and other countries in the world, many nations immediately stand to  benefit from the soybean wars that Trump’s tariffs have initiated.   Brazil is the largest exporter to China after the US.  It is estimated that the soybean could be responsible for up to 90 percent of Brazil’s exports by 2020.  India has also been a soybean producer and exporter sending meal to China and Southeast Asia.

As we say in America, “Meanwhile, back at the farm,” Russia does have that large swath of land just close to the Chinese border that would be perfect for raising soybeans.  Of course, they would have to purchase more agricultural machinery and products to do so.

Mary Metzger is a 74 year old semi retired teacher. She did her undergraduate work at S.U.N.Y. Old Westbury and her graduate work In Dialectics under Bertell Ollman at New York University. She has taught numerous subjects, from Public Sector Labor Relations to Philosophy of Science, to many different levels of students from the very young to Ph.D. candidates, in many different institutions and countries from Afghanistan to Russia. She has been living in Russia for the past 12 years where she focuses on research in the Philosophy of Science and History of the Dialectic, and writes primarily for Countercurrents. She is the mother of three, the grandmother of five, and the great grandmother of two.


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