By Casey Hall, Brenda Goh and Mei Mei Chu

SHANGHAI (Reuters)

U.S. agriculture producers are bracing for a potential new trade war under U.S. President-elect Donald Trump which could impact exports of farm goods to China. Producers expressed concern over possible new tariffs but felt better prepared compared to previous years.

Several U.S. growers, ranging from almond to soybean producers, are attending the China International Import Expo (CIIE) this week to encourage import purchases and engage with officials.

The sector is still recovering from tariffs of up to 25% imposed by Beijing on U.S. farm imports during the 2018 trade war, which were in retaliation against U.S. duties. China remains the largest market for U.S. farm goods, especially soybeans, but has reduced purchases recently. According to the U.S. Department of Agriculture (USDA), agricultural exports to China fell 24% last year, totaling $29.1 billion.

This trend is expected to continue, though China will still be a crucial market, as noted by Jason Hafemeister, USDA Acting Deputy Under Secretary for Trade and Foreign Agricultural Services.

Hafemeister expressed concern over potential disruptions in U.S.-China trade and emphasized the importance of diversifying markets.

Trump's recent election win has raised fears of a blanket 60% tariff on Chinese goods, which could lead to retaliation against U.S. agriculture exports. However, Hafemeister remains hopeful, saying, "They need food, we produce a lot of food…"

The U.S. farm industry is exploring markets in Southeast Asia, Africa, and India, aiming to diversify beyond bulk grains into value-added products, although the size of China's market remains unmatched. Ryan LeGrand, CEO of the U.S. Grains Council, pointed out the challenge of finding alternative markets that could have a significant impact.

Verity Ulibarri, a New Mexico sorghum farmer and chair of the U.S. Grains Council, expressed confidence in the industry's ability to navigate trade war risks based on prior experiences.

In response to Trump's election victory, China’s soymeal and rapeseed meal future contracts saw a rally.

Allan Garbor, chair of the AmCham Shanghai business chamber, mentioned the uncertainty surrounding future trade discussions, hoping that food and agriculture would remain a stable area amidst the turmoil.