President-elect Donald Trump's tough talk about China's trade policies during the campaign has rankled the communist nation and now raises the possibility of a backlash to the U.S. agricultural industry.
Candidate Trump called China a "currency manipulator" and threatened to put into place 45 percent tariffs on Chinese imports. He also threatened trade with Mexico, including getting rid of the North American Free Trade Agreement, or NAFTA deal, which would have serious implications for agriculture and other industries.
"The current uncertainty diminishes the appetite foreign businesses have to investment in U.S. businesses," said Rabobank Food & Agribusiness Research and Advisory in a report released this week. According to Rabobank, the U.S. food and agriculture industries are "one of the main drivers of global agriculture and trade."
Ag exports from the U.S. approached $127 billion in the latest year, and besides being the world's top corn exporter, the U.S. is a major seller of soybeans globally with about half of the crop going overseas to customers such as China. Ag exports to China have grown more than 200 percent in the past decade and last year topped $20 billion.
U.S. soybean exports to China have been strong this year, but the sharp rhetoric on trade from Trump during the campaign now is translating into tough talk from the communist nation about possible retaliation if the new administration imposes tariffs.
"If Trump imposes a 45 percent tariff on Chinese imports, China-U.S. trade will be paralyzed," Global Times, a Chinese state-run news agency, wrote Sunday. "China will take a tit-for-tat approach then," it added, mentioning everything from Boeing orders to agricultural imports such as U.S. soybeans and corn.