World Grain - December 2024 - 26

FEATURE: UNCERTAINTY AHEAD IN SECOND TRUMP TERM
It is possible to look back at Trump's first
term to make an educated guess on what
the future might hold. But as a secondterm
president, Trump won't have
re-election in mind when creating
policies. Trump learned from his
first term and understands the levers
of government better and where
the pressure points are, said Stephen
Nicholson, executive vice president,
global sector strategist-grains and oilseeds,
Rabobank.
Nicholson
" He's going to bring people into his administration
who have not been mainstream Republicans but
are very loyal to him and his policies, " he said. " You
worry about whether the new administration would be a
lot more ideological. "
Trump nominated on Nov. 24 former aide
Brooke Rollins to lead the US Department of
Agriculture (USDA). Rollins is currently
president and chief executive officer of
the America First Policy Institute, a
nonprofit think tank formed in 2021
to promote Trump's public policy
agenda. She also served as the director
of the Domestic Policy Council
and assistant to the president for strategic
initiatives in Trump's first presidential
term.
Rollins has a juris doctorate from the
University of Texas School of Law and a degree
Van Pevenage
in agricultural development from Texas A&M University.
She is originally from Glen Rose, Texas, US, and was a
member of the National FFA Organization growing up.
The National Grain and Feed Association said it
worked well with the first Trump administration and
looks forward to working with the second one once the
team is in place.
" Trump has indicated tax reform, trade and immigration
are early top issues for him, " said Stephanie See, vice
president of legislative and public affairs for the NGFA.
" NGFA is closely watching developments on these issues,
as well as progress on the next farm bill and Water
Resources Development Act. "
In his first term, during the trade war with China,
Trump gave farmers a lot of money to offset their losses
as exports to China plummeted.
" He doesn't have the same incentive to do that this time
because he doesn't have to get the votes the second time
around, " Nicholson said.
Trade and tariffs
Trump vowed to be even more assertive with China this
time around, calling for 60% tariffs across the board on
26
Chinese goods. Since 2018, after Trump set tariffs on $30
billion of Chinese goods and China retaliated, the US share
of Chinese soybean imports dropped to 18% from 40%.
At the same time, Brazil's share has grown to 76% from
46%, according to Chinese customs data. China also has
purchased more soybeans from Argentina, Ukraine and
Australia.
With more Trump tariffs, the United States can expect
additional retaliation from China, with agricultural products
at the top of the list, Nicholson said. Some economists
say overall US-China trade could plunge an additional
70% from the already reduced levels.
" Within our wheat, corn and soybean business, everybody
is on pins and needles for tariffs, " said Jeff Van
Pevenage, CEO of Columbia Grain International (CGI),
in an interview with World Grain. " What will happen with
China, particularly for us in the Pacific Northwest? The
tariffs in place from China against the US (in 2019) was
really detrimental to the export industry here. "
But he noted that the tariffs against China remained in
place through the Biden administration and there was no
further retaliation from China. CGI, based in Portland,
Oregon, US, is a supplier of bulk grain, pulses, edible
beans and oilseeds with a supply chain network of 8,000
farmers across the northern tier of the United States.
" I believe we will probably see 90 to 180 days where
we're going to be looking at more negotiations and diplomacy
before bringing on any worse tariffs against China
in the US, " Van Pevenage said. " Through the next six
months, I suspect it will be relatively normalized export
trade for US agriculture. "
The impact on US agriculture is hard to gauge, said
Tanner Ehmke, lead grain and oilseed economist for
CoBank, because the extent of the tariffs and possible retaliation
is unknown.
" The Chinese are sitting on a record stockpile of soybeans,
so that gives them leverage in trade negotiations, "
Ehmke said. " At the same time, they're leaning more on
Brazil. Perhaps they don't necessarily need much retaliation
with the US, when they're already moving away from
the US and have their needs met for the near term. "
There's not much preparation to be done ahead of time,
Van Pevenage said, but CGI will be looking for different
markets. If more Brazilian soybeans are going to China,
there's someone else in the world not getting Brazilian
soybeans, he said.
" The US will have to replace those, " he said. " It can
still hurt sectors or regions of the ag industry because
maybe there's more exports out of the Gulf and less out of
the Pacific Northwest. "
It's important to build relationships and know the buyers
of the world, Van Pevenage said.
" But markets are going to dictate pricing, " he said. " The
infrastructure is generally in place, although it's chalDecember
2024 / World Grain / World-Grain.com
Photos courtesy of xxxxxxxxxxxxxxxxxxxx, CGI
http://www.World-Grain.com
World Grain - December 2024

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