"Cutting off all US supply chain in China" is on the table, but definitely way down the list of what China wants to do.
Exactly. It's one thing for China cut off the supply of microchips to the United States. The U.S. would have to make a massive investment in building new supply chains domestically and with other countries.
It's another thing if the United States cuts China off from $6 billion in soybeans each year. China's population will start to starve long before a microchip shortage really hurts the U.S.
China has already stopped importing large amounts of US agricultural products, including soybeans. The US gov is now subsidizing farmers to make up for this loss to the tune of $28 bil in direct payments to US farmers so far...
I don't really understand why people think most large nations can't feed their own people. China can easily do so, albeit with some changes to their diet. China is the top producers in the world of many crops: wheat, rice, potatoes, grapes, apples, tomatoes, watermelons, hogs, sheep, etc. and #2 or #3 in many others: corn, bananas, beef, chicken, milk, etc. Sure they import a huge amount of food as well. But so does the USA.
they use it for pig feed and it's use as a component in many food products. I don't think they technically depend on it, but they depend on it and have to import huge amounts. If they didn't, they'd either have to make a domestic source (they have had trouble with this) or switch to other protein sources.
Or buy them from Brazil. Like they are now since the tariffs happened.
It's not a question of switching to Brazil. China was already buying from Brazil. But Brazil doesn't have the capacity to make up for a cut-off of American supplies.
Further, soybeans are seasonal. The reason that China buys from both the U.S. and Brazil is because they have harvests at opposite times of the year. Even if Brazil managed to magically ramp up to fill 100% of China's need in each Brazilian growing season, what is it going to do the other six months of the year?
>It's not a question of switching to Brazil. China was already buying from Brazil. But Brazil doesn't have the capacity to make up for a cut-off of American supplies.
This literally already happened as another poster said...
Many of the pigs are dead thanx to ASF, so they won't be needing huge amounts this year. Also, they have rented vast amounts of land in Ukraine, Africa.
Trump wants a trade agreement with the EU for soy and beef in exchange for not imposing tariffs on cars. It probably won't happen, as the EU is too slow to act and most likely won't accept hormone treated beef.
Soy is primarily used for pig feed. Brazil is razing forest to fill demand in coming years. US isn't going to starve China which is nominally food secure, as in no one is going to starve because of it. It has potential to make people pissed, current raising pork prices due to disease is already causing strife. It's also somewhat opportune timing however, China wouldn't have the soy card to squeeze Trumps farmers base if disease didn't dramatically reduce demand for soy.
Also China depends on US for IC (and airplane engines).
Exactly. It's one thing for China cut off the supply of microchips to the United States. The U.S. would have to make a massive investment in building new supply chains domestically and with other countries.
It's another thing if the United States cuts China off from $6 billion in soybeans each year. China's population will start to starve long before a microchip shortage really hurts the U.S.