Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Soybeans imported from Brazil are unloaded at China's Nantong Port. Photo: Xu Congjun/Visual China Group via Getty Images

Although a partial agreement was announced last week, the U.S.–China trade war has already brought about changes in global supply chains that could have lasting effects on the American economy, particularly in the agricultural sector.

The big picture: The prolonged U.S.–China tariffs are exacerbating the harms to American farmers wrought by both other trade conflicts and the U.S. withdrawal from the Trans-Pacific Partnership. Foreign food producers are now likely to benefit at the expense of their U.S. counterparts, who have struggled to shift former Chinese exports to other markets.

What's happening: After China imposed a retaliatory 25% duty on many U.S. agricultural products in July 2018, those exports fell by 53% for the year. They dropped another 8% by the end of July 2019.

By the numbers: Australia, New Zealand, Brazil, Canada, the EU and other agricultural producers have all seen their exports to China grow while those of the U.S. have declined.

  • Brazil's share of China's $38 billion soy import market shot up to 76% in 2o18, while the U.S.' fell from 35% to 19%. Brazil has also taken up 15% of the $2 billion pork market, as the U.S. has dropped from 15% to 6%.
  • Ukraine has capitalized on the trade war to increase its share of China’s $790 million corn market from 61% to 81% through 2018. The U.S. share is down to 9%, from 17%.
  • Canada, Kazakhstan and Russia gained on China's $780 million in wheat imports at the expense of the U.S., whose market share fell from 38% to 14%.

Between the lines: With no end in sight for the current trade war, international competitors could secure enduring advantages.

  • The U.S. never made up the market share in beef exports it lost to Argentina, Brazil and Australia after a 2003 trade scuffle. Its share dropped from 69% in 2002 to 1% in 2018.
  • In the current conflict, China has turned to Brazil for most of its soybean imports, establishing new supplier relationships and incurring other transition costs that will keep Brazil's soybeans competitive even if U.S.–China tariffs are relaxed.

What to watch: In announcing last week's limited deal, the White House said China agreed to buy at least $40 billion of U.S. agricultural products, though few details have emerged.

  • Presidents Trump and Xi are set to meet in November on the margins of the Asia Pacific Economic Cooperation (APEC) meeting, where a final agreement on these purchases would likely require clearing other technical and political hurdles.

Decker Walker is a managing director and partner at Boston Consulting Group, where he leads the firm’s global agribusiness sector.

Go deeper

5 hours ago - Politics & Policy

Rahm Emanuel floated for Transportation secretary

Rahm Emanuel. Photo: Joshua Lott for The Washington Post via Getty Images

President-elect Biden is strongly considering Rahm Emanuel to run the Department of Transportation, weighing the former Chicago mayor’s experience on infrastructure spending against concerns from progressives over his policing record.

Why it matters: The DOT could effectively become the new Commerce Department, as infrastructure spending, smart cities construction and the rollout of drone-delivery programs take on increasing economic weight.

5 hours ago - Politics & Policy

Biden turns to experienced hands for White House economic team

Illustration: Sarah Grillo/Axios

Joe Biden plans to announce Cecilia Rouse and Brian Deese as part of his economic team and Neera Tanden to head the Office of Management and Budget, sources tell Axios.

Why it matters: These are experienced hands. Unveiling a diverse group of advisers also may draw attention away from a selection of Deese to run the National Economic Council. Some progressives have criticized his work at BlackRock, the world's largest asset management firm.

Biden taps former Obama communications director for press secretary

Photo: Mark Makela/Getty Images

Jen Psaki, who previously served as Obama's communications director, will serve as President-elect Joe Biden's press secretary, the transition team announced Sunday.

The big picture: All of the top aides in Biden's communication staff will be women, per the Washington Post, which first reported Psaki's appointment.