We’ve all been there. You’re running late for work, sprinting through the office lobby, screaming at some poor souls in the elevator to hold it, please God hold it, wilting and wheezing as the doors slide shut while you’re just barely out of reach. Damn. Just missed it.
For Peak Pegasus, a China-bound cargo ship packed full of $20 million worth of American soybeans, the elevator doors were the 5 PM deadline on July 6, the day that President Trump’s new trade tariffs went into effect. Chinese Weibo users cheered Pegasus on, rooting for the ship as it raced to make it to port in time, as Reuters reported. (“You are no ordinary soybean!” said one new fan converted to the riveting sport that is international trade.)
The ship, after its month-long voyage from Seattle, came excruciatingly close to making it through customs in Dalian, China in time, but arrived 30 minutes after the cutoff that Friday, when China’s counter-tariffs imposed a levy of 25 percent on over 300 American commodities, including soy beans.
For over a month, with no buyer for nearly 70,000 tons of soybeans, poor Peak Pegasus was basically adrift at sea, sailing in literal circles just off the coast of China.
China purchases about 60 percent of America’s soybean harvest annually, amounting to nearly $14 billion in business. When Trump announced his $38 billion worth of tariffs on Chinese imports, China decided it would cancel its purchase of 366,000 tons of American soybeans, among other commodities, plus slap a 25 percent tariff of their own on these imports.
When Peak Pegasus set out from Seattle in June, these tit-for-tat tariffs were just whispers in the wind, but by the time the ship reached its destination, the buyer for all those soybeans had changed their mind. Seemingly stuck, it drifted around in the Yellow Sea for over a month.
Finally, the Global Times, China's national English-language newspaper, reported this morning that the ship's owner has found a Chinese buyer for the beans. However, it's still keeping the ship circling due to limited storage capacities on land.
The ship, owned by JP Morgan Asset Management but chartered by agricultural commodity traders Louis Dreyfus Company, costs about $12,500 per day to loiter in the sea, but trade experts, according to The Guardian, said it was probably smarter to keep it idling near China than to send the beans elsewhere to another buyer. China is the world’s largest importer of soybeans, which are processed in the country for ethanol, cooking oil, and feed for livestock.
In July, China turned to Brazil to keep its soybean supply flowing, but the Brazilian harvest is about to run out. By about October, China won’t have many other options besides relenting and subsidizing American imports. And at long last, our patient little buddy Peak Pegasus, according to Global Times, will be able to sail into port on Saturday to unload.
In the meantime, hopefully Peak Pegasus’ crew hasn't gone full Tom Hanks in Cast Away and has kept their wits about them while they wait.