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As Trump leads a China revolution in the heartland, the Midwest soybean makes the Middle Kingdom great again

Tea from China was once associated with the “cause of freedom” in the American Revolution and the creation of the new commercial republic in 1776. American colonial life was infused with Chinese teas, luxuries such as silks, porcelains, wallpapers and other products. Undeniably, the new republic attempted to emulate Chinese affluence while developing a tea-drinking socio-economic culture to nurture the promising American civilization.

Patrick Mendis
Patrick Mendis

Like other Founding Fathers in their generation, Benjamin Franklin was a habitual tea drinker. He estimated that “a million of Americans drink tea twice a day.” In the last quarter of the 18th century, Americans consumed more than 1 billion cups of tea annually.

Some 240 years later, a “Trump revolution” appears to have begun with soybeans. Trump’s “America First” campaign slogan, resonating a “cause for prosperity” in rural hinterland communities neglected by the Washington elites and New York financiers, appealed broadly. This hinterland electorate has largely resided in the soybean-growing triangle region of upper Midwestern states from the Corn Belt of the Dakotas, Iowa, Minnesota and Nebraska to Pennsylvania and down into the Mississippi Delta.

From tea to soybeans

In a complete role reversal from colonial America, China is now fascinated by all things American. Over the last three decades, China has emerged as the largest importer of American soybeans, with more than 1 billion bushels in 2016. Indeed, China imports soybeans exclusively from the United States. The U.S. Department of Agriculture estimated that China only imported about 18 million bushels of soybeans in the mid-1990s. Since then, the Chinese appetite has rapidly increased by making soybeans the leading export industry, followed by Boeing airplanes, recyclable materials, and automobiles in the American hinterland.

Recognizing the demographics of his voters and support-base, President Trump nominated Iowa Gov. Terry Branstad as his ambassador to China. It was a strategic move to “open significant opportunities for Iowa and U.S. businesses and farmers” as China is the leading importer of Iowa agricultural products, especially soybeans and pork. Trump said, “Terry Branstad successfully developed close trade ties with China while serving as governor of Iowa” and “he represents America’s interests and further develops a mutually beneficial relationship with China’s leadership.” Branstad then said, “I’ve known President Xi Jinping for many years and consider him an old friend” as Xi had visited Iowa and stayed with a farming family in 1985.

President Trump’s voter records resemble the geospatial map of the soybean-growing region. In a Time magazine article, the authors analyzed the county-level results that “show stunning shifts in Trump’s favor through the upper Midwest and Northeast [extending from Minnesota, Iowa, and Illinois to Pennsylvania and Maine], demonstrating the success of his trade and economic message in the nation’s heartland.”

Two professors at the University of Illinois at Urbana-Champaign wrote, “one way to visualize China’s demand for soybeans is to map the consumption categories as they relate to county-level soybean production acres across the U.S.” This geospatial footprint of Chinese demand for American soybeans — especially for animal feed and cooking oil — led to an increase in investment of the domestic agribusiness sector.

Geography matters

Tom Vilsack, former President Obama’s secretary of agriculture, has enthusiastically endorsed the new envoy to China. Both Trump and Branstad must “have patience” in dealing with America’s largest agricultural import partner, advised Vilsack, who was also the former governor of Iowa. He added that the Obama administration had “been talking with our Chinese friends for quite some time about biotechnology approvals, about resuming U.S. beef exports to China, and other issues that haven’t been easy. We’ve made progress but there is more work to be done.”

Like Vilsack, Branstad understands the value of the China connection for American trade expansion, job creation, and income generation among Trump voters. “Farmers understand trade because it impacts their bottom line,” Vilsack explained.

As a businessman, Trump also recognizes the importance of China — even as he has maligned China in his campaign speeches and interviews. He has incurred enormous loans from the Bank of China while the Trump Tower houses the U.S. headquarters of the Industrial and Commercial Bank of China, the largest two state-owned Chinese banks. “I love China!” he said at the start of his campaign in June 2015 at the Trump Tower. “The biggest bank in the world is from China. You know where their United States headquarters is located? In this building, in Trump Tower.”

As the president, Trump now realizes the trilemma of safeguarding his voters who depend on American exports, proposing a 45 percent tariff on Chinese imports that risks potential retaliation by Beijing, and finally, continuing a China trade that would benefit his family and business associates. Balancing these three conflicting frontiers of national and personal interests is a formidable challenge for the executive-turned-politician, who now needs to work on the complexities of global geopolitics within the equally powerful three branches of the U.S. government.

Constructive and nostalgic

Understanding an assertive China and complicated geo-economics, Trump’s daughter Ivanka and her husband, Jared Kushner, a senior adviser to the president, met privately with Chinese Ambassador Cui Tiankai in Washington earlier this month. Soon after, the White House sent a carefully worded letter to Beijing saying, “President Trump stated that he looks forward to working with President Xi to develop a ‘constructive relationship’ that benefits both the United States and China.” In an “extremely cordial” follow-up phone conversation, Trump told Xi that he now “agrees to honor the ‘One China’ policy” after accepting a controversial call from the president of Taiwan, which Beijing considers a breakaway province. It seems that his China-bashing campaign “headlines” are now giving way to the historically forgotten “trendlines” of China trade that began with tea.

In colonial America, ginseng and fur industries connected the rural farmland and hinterland with the coastal metropoles of Boston, New York, and other Atlantic port cities. The United States is now inextricably linked with China in almost every sector of the American economy and foreign policy.

In all this, an asymmetrical Sino-American relationship still exists in the macroeconomic environment and trade policy framework — including currency exchange, debt service, market access, and corporate competition. As President Xi announced at the Sunnylands summit with President Obama, a “new type of major-power relationship” is eventually required to move forward within the evolving structure of over 100 bilateral dialogues between the two countries.

As China quietly leads the way, the subdued Trump White House has decided to open a different pathway for an alternative but “cooperative relationship” with China. President Trump may hopefully elevate the bilateral relationship from colonial America’s “cause of freedom” to a “cause of prosperity” for mutual benefit between the two nations and the world.

Patrick Mendis, an alumnus of the University of Minnesota’s Humphrey School of Public Affairs, is an associate-in-research of the Fairbank Center for Chinese Studies at Harvard University, a senior fellow of the Pangoal Institution in Beijing, and a distinguished visiting professor of Asian-Pacific affairs at Shandong University in Jinan, China.

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Comments (4)

I would appreciate the author’s thoughts on these questions:

Why is it more advantageous to the Chinese to import soybeans and meat than to engage in this land-based production itself?

Producing agricultural commodities and shipping them great distances externalizes substantial environmental costs onto the public commons. How would the elimination of this subsidy affect this form of U.S./China trade?

What is the distribution of the economic benefits of this agricultural export relationship as between the large multinational ag concerns and the rural communities here?

Delusional

There really is nothing worse than someone who tries to pretend Trump has coherent policies on trade.

And yeah, soybeans were the reason he won in Midwestern states. Soybeans.

This is not a very coherent

This is not a very coherent piece, but one thing is clear: the author reveals that our President Donald Trump is--through his daughter and her husband,both close to the President in the White House as advisors--very much paying attention to his business interests while he pretends to pay attention to geopolitical questions in foreign affairs.

Trump hasn't made the smallest move to disassociate himself from his private business interest.

Copy cat

China is even more internally focused than the United States and equally positive about the exceptionalism of its culture. It has taken advantage of the US in many ways in the area of trade, and follow a pattern of learning from us, how they can, and adopting our ideas. As they only buy soybeans, they could put extreme pressure on Midwestern farmer by growing there own. It was disappointing not to be told if their climate and agricultural systems could do this, as that would stress our national economy.