TAIPEI -- Taiwan will import 30% more soybeans from the U.S. in 2018 and 2019 to improve relations with President Donald Trump by extending a lifeline to states hit hard by Chinese tariffs ahead of crucial U.S. elections.
The decision to purchase up to 3.9 million tons of soybeans valued at $1.56 billion from states like Minnesota and Iowa was made late last month when Taiwanese trade officials and business leaders visited the U.S. The public and private sectors are making every effort to build a mutually beneficial relationship, Stanley Kao, the island's representative to the U.S., said in a statement.
Both Minnesota and Iowa are part of the American Farm Belt, which has suffered from China's retaliatory tariffs on U.S. soybeans. These states are being closely contested in the Nov. 6 midterm elections, and Trump's Republican Party may pay a price for the administration's trade actions.
Chinese state media have taken the rare step of lobbying American voters by placing a four-page ad in Iowa's largest newspaper denouncing U.S. protectionism. "China is a vital and robust market we cannot afford to lose," the advertisement quoted an American expert on soybeans saying.
"The additional soybean purchases reflect President Tsai Ing-wen's aim to strengthen ties with the U.S.," a Taiwanese diplomatic source said. Tsai is also aiming to improve relations on the state level, and discussed trade cooperation with Wyoming Gov. Matt Mead when he visited Taiwan on Oct. 2.
Taiwan sends a delegation to the U.S. once every two years to review its soybean purchases. Although the purchase volume for 2018 and 2019 was agreed upon by last year's representatives, the amount was increased 30% during the September trip. Average annual imports will also rise 30% from 2017, according to the island's Council of Agriculture.
China is the U.S.'s largest destination for soybean exports, importing about 32.85 million tons last year. Although Taiwan only imports about 1.4 million tons by contrast, the decision to import more soybeans is a clear gesture toward maintaining good relations with the U.S. by reducing the trade imbalance.
Taiwan's imports from the U.S. in the January-August period rose 6.6% on the year to $25.4 billion, a record high, according to the island's Ministry of Economic Affairs. And more U.S. companies are procuring parts from Taiwan rather than China due to the trade war.
Taiwan's trade surplus with the U.S. was $6.7 billion in 2017, less than 1% of America's entire trade deficit. But the island bought $3.7 billion in farm imports from the U.S. last year, worth a quarter of its total agricultural imports. Taiwan is aiming to increase imports while exports rise to prevent the trade imbalance from expanding.
The U.S. also said Sept. 24 that it would sell a total of $330 million worth of arms, including spare parts for F-16 fighter planes, to Taiwan. The Tsai administration appears to be trying to move closer to the U.S. through greater imports of defense equipment.