Trade tensions worry soybean exporter at Port of Vancouver

17.04.2018

United Grain says it’s already seeing effects of U.S.-China tariff talk.

The latest trade dispute between the United States and China has created even more uncertainty in a network of local companies.

China this month responded to the Trump administration’s steel and aluminum tariffs by stamping a 25 percent duty on nearly 130 U.S. products, ranging from fruits and nuts to cars and trucks.

Among those products are soybeans — a crop mainly grown in inland states, but with a supply chain woven through the Pacific Northwest. If enacted, the tariffs would hit farmers hard, but also transporters and processors.

United Grain Corp. operates the largest grain elevator on the West Coast at the Port of Vancouver and said it is already seeing effects of tariffs talk. Unlike its wheat, United Grain exports its soybeans almost exclusively to China.

“Tariffs on soybeans almost certainly will result in the loss of volume to be executed through our elevator,” said Gary Williams, vice president of marketing and business development.

He added that the loss ripples throughout the region.

“This volume can’t be easily regained, which results in less revenue for the Port of Vancouver, and less hours worked for labor, inspection personnel, ship assistance and other related functions that create earnings for families in Clark County,” he said.

United Grain Corp. is a subsidiary of Japanese conglomerate Mitsui & Co., but that does not shelter the local operations from the impacts of tariffs, Williams said.

Soybeans make up approximately a quarter of its overall exports. They are bought by Chinese “crushers” who make oil for food products and meal for animal feed. Those companies are already beginning to take business to competitors from Canada and South America, Williams said.

“It’s so prohibitive, price-wise,” he said, noting that Brazilian soybean prices typically drop this time of year, yet sudden demand has kept prices high.

Still, he added that it is too early to tell how this would impact its 100 local employees. It remains to be seen whether the tariffs will be enacted and, if so, how long the tariffs would last.

“It all depends on the duration,” Williams said. “If an employee walked up and said, ‘Gosh, are my hours going to get cut?’ it is way too early to make that assumption today.”

Ports and transporters

United Grain Corp. may be among the most immediately affected, but tariffs could shake supply chains locally and throughout the state.

According to the Washington Council on International Trade, nearly 40 percent of jobs in Washington are tied to international trade.

BNSF Railway, for example, employs nearly 700 people in Vancouver that it says are directly related to the transport of food, lumber, automobile parts and more before they are shipped overseas.

In the case of soybeans, BNSF freights the crop from farms in North and South Dakota, Minnesota and Nebraska all the way through the ports of Vancouver, Kalama, Tacoma, Seattle and Portland. Nearly all — 99 percent — go to China, according to spokesman Gus Melonas.

“The impact, we can’t quantify at this point as discussions are underway and we can’t speculate,” he said. “You can say, generally, yes.”

Likewise, the Port of Vancouver generates revenues by charging fees to handle millions of metric tons of soybeans on its property. The crop is second only to wheat in the volume exported.

Spokeswoman Abbi Russell said it hoped to insulate any drops in soybean volumes by keeping its commodities diverse. The port also ships corn, scrap metal, pulp and sorghum, among other things.


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