China calls the U.S. on its $50 billion retaliatory tariff threat

It’s getting easier to say that the U.S. and China are engaged in an all-out trade war.

It has definitely been a frosty end to the week as the U.S. confirmed on Friday that it plans to add roughly $50 billion in trade tariffs under Section 301 on certain Chinese goods effective July 6. The White House made it clear that the action was a response to “unfair trading practices and theft of U.S. intellectual property and technology.”

Even before the U.S. tariffs were confirmed, President Trump said that if China retaliated the U.S. would up the anti to $100 billion.

By day’s end, China had called President Trump’s bluff and confirmed its retaliation with $50 billion in tariff of its own, also effective July 6th.

The list of goods that would be impacted by the Chinese tariffs include soybeans, corn, wheat, cotton, rice, sorghum, beef, pork, poultry, fish, dairy products, nuts and vegetables.

Some in the U.S. agriculture community are giving the president the benefit of the doubt, but not everyone is.

Alan Kemper, past president of American Soybean Association and National Corn Growers Association and trade adviser to the USDA and USTR, tweeted:

The tariff tit for tat is certainly counter to the belief the relationship between the U.S. and China was improving. It’s also clear today that President Trump’s boasts about a trade deal back in May were slightly premature.

“Since these tariffs will not take effect until July 6th, it gives the U.S. and Chinese negotiators time to come to some sort of agreement that will kick those tariffs away,” noted Jim Wiesemeyer, Washington Analyst with ProFarmer on Agritalk on Friday,

The performance of November soybeans has not been stellar in the past week or month or three months.

Courtesy of Barchart

Some traders believe that the drop in soybeans has more to do with fair weather and improved crop conditions, but ignoring the impact of a trade war could prove dangerous.

U.S. based agricultural trade advocacy group Farmers for Free Trade tweeted on Friday that, “Soybean exports to China could drop by a whopping 65 percent if China imposes a 25 percent tariff on U.S. soybeans.”

Farmers and market traders will be watching whether President Trump follows through on his threat to impose an additional $100 billion in tariffs as promised.

Related stories:

 

Shaun Haney

Shaun Haney is the founder of RealAgriculture.com. He creates content regularly and hosts RealAg Radio on Rural Radio 147 every weekday at 4:30 PM est. @shaunhaney

Trending

Wheat prices jump into August — This week in the grain markets

This week, winter wheat prices touched a three-year high, but it didn’t last. Chicago SRW wheat prices for September 2018 gained 5 per cent or about 26 cents US/bushel to close at $5.56. While the December 2018 contract was up 5.4 percent — or nearly 30 cents — to finish a tad under $5.80. In…Read more »

Related

Leave a Reply

 

This site uses Akismet to reduce spam. Learn how your comment data is processed.