Heartland farmers “cautiously optimistic” about new China trade agreement

Updated: Jan. 15, 2020 at 11:14 PM CST
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FRANKLIN COUNTY, Ill. (KFVS) - The U.S. and China have signed a new trade agreement that is expected to boost American exports, including agricultural goods.

The “Phase One” trade deal follows two years of retaliatory tariffs between the countries. It is not a final resolution to the trade war because those billions of dollars in sanctions are still in place.

Members of the Illinois Farm Bureau in Franklin County are calling the agreement a great step forward, but want to see if China will uphold their commitment to buy more in U.S. goods.

“It’s a good thing, and it’s positive but we also have to remember this is just Phase One,” said Kelly Robertson who farms in Benton, Illinois.

“The interesting thing to me is that the sanctions don’t go off until Phase Two is signed, so that is why I’m cautiously optimistic,” Robertson added.

In the deal, China agreed to purchase $200 billion more in U.S. exports than it did in 2017 when the trade dispute began.

If it lives up to the hype, Franklin County Farm Bureau president Leon McClerren thinks it could help some producers rebound from the historic 2019 flood.

“To get back some of that market we’ve lost will be big,” McClerren said. “2019 was probably one of the most challenging years most producers will tell you they ever faced, so moving into 2020 when you start with a little optimism it’s kind of like a warm sunny day in January there is nothing wrong with it. It’s good.”

Parts of the economy that will benefit from the new trade agreement include manufacturers, energy producers and the agricultural industry.

Illinois is the nation’s number one soybean producer, and Robertson thinks China realized they need American farmers.

“China has the largest growing middle class in the world. They have to feed these people and they don’t have the capability to do it themselves," Robertson said. "So they are almost forced to have to buy whether it’s meat or grains from other parts of the world. We are the most stable supply. We are the most continuous supply they’re going to get.”

While better trade relations with China are in sight, both farmers are still wary about the future.

“China is the bull in the China shop that can move markets and change markets literally by just issuing a statement,” Robertson said.

“Everybody has got to make their case but everybody has to be able to save face," McClarren added. “This is not about us looking good them looking bad. This is about it being good for both economies, therefore it’s sustainable.”

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