President Donald Trump is taking the trade war with China to an unprecedented level that would impose tariffs on nearly every export China sends to the United States. Following the announcement Monday night by Trump that he is seeking an additional $200 billion worth of tariffs, China is looking to retaliate again. Trump says if China does, he would seek to impose another additional $200 billion in tariffs, taxing a total of $450 billion of the $505 billion of Chinese goods sent to the U.S. each year. In its response, China called the extreme pressure from Trump “blackmail,” adding that if the U.S. becomes “irrational” and issues the proposed list of products, China will “have to adopt” strong countermeasures. China has already vowed to impose tariffs on U.S. agricultural products, such as soybeans and pork, and many others, including corn, sorghum and beef.
The trade war is proving to be costly to U.S. farmers. University of Illinois agriculture economist Scott Irwin this week on Twitter says the outlook has “moved into disaster territory,” specifically, regarding soybeans. And, Jim Bower of Bower Trading in his daily newsletter wrote: “At this point, it is hard to imagine the trade news getting much worse.” New crop soybean futures have dropped roughly 20 percent since May 29th, and corn futures are down 16 percent since late May.
For soybeans, the decline is near a dollar and a half per bushel, representing a loss of more than $6 billion on the 2018 soybean crop. The American Soybean Association Tuesday linked the drop to the trade war, as President John Heisdorffer stated: “Soybean prices are declining as a direct result of this trade feud.” The statement says ASA is disappointed and highly concerned that trade tensions continue to ratchet up rather than de-escalate between the two countries.
Farmers for Free Trade is again placing advertisements on cable television showing an on-the-ground look at how current trade disputes are damaging export markets for U.S. farmers. In conjunction with the U.S. Apple Association, the advertisement targets the retaliations to the Section 232 tariffs that include U.S. apples. Airing on television news networks frequently watched by President Trump, the advertisement will run in the immediate aftermath of new retaliatory tariffs being announced on American farm exports from key U.S. trading partners including Mexico, India, Canada, China and the European Union.
U.S. apple exports are particularly prone to be hard hit by retaliatory tariffs. Jim Bair, U.S. Apple Association President & CEO, says: “Profit margins in agriculture are razor-thin, or nonexistent,” adding the dispute needs “resolved amicably and quickly.” However, Farmers for Free Trade director Brian Kuehl says the “situation is going from bad to worse.”
Source: NAFB News Service