Trade wars between USA and China has widely been discussed since early April all over the world. President Donald Trump had promised to tackle trade deficit against China during his election campaign and recently he declared to levy 25% customs duty for 1300 items from China that amount 50 billion USD annually. Beijing retaliated this rapidly. They declared to levy extra customs duties of 25% for 106 American products including agricultural products like soybean, sorghum and wheat as well as automobiles and chemicals. Markets have been fluctuated as a result of trade wars waves between the two countries. Especially, it has been a major concern for American farmers since US agricultural products were also among retaliation targets of the Chinese government. Their concern is certainly not groundless because China is the number one destination for more than 50 American products like wheat, soybean and cotton. To give an example, US soybean exports to China has a volume of 13 billion USD annually.
Diplomatic efforts are ongoing in order to solve the conflict in a peaceful way. We don’t know if the two sides are going to come to a mutual understanding. However we can learn from this latest conflict. Global trade has developed in last 30 years such that countries have become interdependent for many products. Global agri-business know worth more than 1,1 trillion USD. Well, what if protectionist policies like the one between China and the USA spread in waves?… And what if customs walls become higher and higher?…
In a globalized world that most countries have to export products to meet their food needs, recent developments will clearly threaten food security. Food crises that we experienced in 2007-2008 sales period – when food prices skyrocketed- may be around the corner.
If there exists such a risk, what should do governments do to ensure food security? The first thing that comes to mind may be taking steps for self-reliance in agriculture sector. But is it really possible for a country that relies on exports for products from fertilizers to seeds and feed to agricultural machinery to ensure self-reliance?
Statesmen should reflect upon these threats as agricultural products constitute the weakest spot for countries during possible trade wars. The China-US conflict must be the alarming bell for all. Because if we let the genie out of the bottle it may be so late.