Tariffs?

[IndyDave1776]

Well it’s been a little hard on us farmers... China is our largest exporter of AG products

I was under the impression that other markets were absorbing a large portion of the agricultural [STRIKE]agreement[/STRIKE]products. I take it that hasn't been the case?

 

[BehindBlueI's]

I have been hearing wailing and gnashing of teeth regarding Trump picking a "trade war" with China.

My question:

What the hell are they going to do? Slap a tariff on returning empty shipping containers?

Agricultural, automotive, and energy industry so far. US soybeans got hit with a 25% tariff, while tariffs against other nations (like India) got dropped or lowered.

There's speculation India will buy US soybeans and then sell them to China to bypass that particular tariff. Seafood may go through Hong Kong. Commodities will probably find some way to limit the effect of tariffs, but it'll take time and China can gut it pretty easily if they choose to.

 

[wagyu52]

 

[BugI02]

China has been stealing our industrial technology for years, decades even. China has been undercutting our manufacturing by tying the yuan to our dollar, thus making us less competitive in the world market. China has been subsidizing its manufacturing further exacerbating our competitive ability and undermining us on the world market and our own.

We have been extremely stupid by deficit spending and allowing China to fund our economy.

With all of these tariffs President Trump is throwing around he is acting like a bull in a "China" shop. (Sorry, couldn't resist.) Who wants a bull in a china shop? Who knows what will get broken? Who knows what damage will be done to who's china? The bull in the china shop could damage everyone's economy. It could damage the United States economy. And you know if our economy suffers so too will everyone else's! What world leaders want to take the chance of a massive global economic meltdown with the bull in the china shop running around p****d off?

I'm willing to wager there is a lot of behind-the-scenes pressure on China to back the F*** up and give the Bull what he wants! If the Bull wants China to stop stealing - STOP! He's going to drag us all down, including China. If the Bull wants China to stop subsidizing its manufacturing - stop, or at least cut way the hell back! If the Bull wants patent and copyright protection - give it to the Bull. He's going to drag us all down, including China. The Bull has a bit in is teeth and he's pulling all of the world in a direction they do not want to go.

'Course, that's just a guess on my part.

Regards,

Doug

Actual bull(s) in simulated china shop. Not the wholesale destruction everyone imagines. Same goes for Trump, the reality doesn't match the hyperbole

[video=youtube;unXVAfbA_xs]https://www.youtube.com/watch?v=unXVAfbA_xs[/video]

 

[Libertarian01]

Actual bull(s) in simulated china shop. Not the wholesale destruction everyone imagines. Same goes for Trump, the reality doesn't match the hyperbole

[video=youtube;unXVAfbA_xs]https://www.youtube.com/watch?v=unXVAfbA_xs[/video]

Neat video. However, reality is irrelevant to the fear it causes. Fear has caused some seriously stupid decisions for generations. The fear of a trade/tariff war will generate as much, if not more, response from those afraid than the actual war might.

Regards,

Doug

 

[Kutnupe14]

[FONT=&amp]Add General Motors to the list of American companies that are expressing concern about the impact that trade tariffs could have on their long-term business prospects.[/FONT]
[FONT=&amp]The U.S. automaker warned that an escalating trade war could backfire and lead to “less investment, fewer jobs and lower wages.” GM expressed its concerns in comments that it submitted to the Commerce Department on Friday.[/FONT]

GM Warns a Trade War May Lead to Lost Jobs and Lower Wages | Fortune

GM is talking about raising prices, or moving production out of the US. If this trend continues unchecked, expect the Trump Tariff, to drive those "blue" states that Trump won, back into the arms of the Democrats.

 

[BugI02]

Neat video. However, reality is irrelevant to the fear it causes. Fear has caused some seriously stupid decisions for generations. The fear of a trade/tariff war will generate as much, if not more, response from those afraid than the actual war might.

Regards,

Doug

https://usa.spectator.co.uk/2018/06/if-this-is-a-trade-war-the-united-states-will-win/
If this is a trade war, the United States will win

If this is a war, it’s one the United States will win. The thing to keep in mind when reading about retaliation is that the US has trade deficits with all of these countries—as well, of course, with China, which is not one of America’s leading sources of steel but whose state-subsidized steel industry is responsible for depressing prices globally. Because the US buys far more goods from these countries than they buy from us, they stand to lose much more in a tit-for-tat over tariffs. How can China or Canada put tariffs on American goods that they don’t actually buy? They can’t, and what they do buy, while not insignificant, pales before what Americans buy from them.

The Spectator (UK)

[FONT=&amp]
RIGHT-CENTER BIAS

These media sources are slightly to moderately conservative in bias. They often publish factual information that utilizes loaded words (wording that attempts to influence an audience by using appeal to emotion or stereotypes) to favor conservative causes. These sources are generally trustworthy for information, but may require further investigation.

[/FONT]

 

[Libertarian01]

https://usa.spectator.co.uk/2018/06/if-this-is-a-trade-war-the-united-states-will-win/
If this is a trade war, the United States will win





The Spectator (UK)

[FONT=&amp]
RIGHT-CENTER BIAS

These media sources are slightly to moderately conservative in bias. They often publish factual information that utilizes loaded words (wording that attempts to influence an audience by using appeal to emotion or stereotypes) to favor conservative causes. These sources are generally trustworthy for information, but may require further investigation.

[/FONT]

Actually, if a true trade war breaks out we all lose - YUGE! Yes, the US buys a helluva lot more from China than China buys from the USA, except for one thing - treasury bonds!

If/when China says, "Ya know, you already owe us a butt-ton of money, and are spending like drunken sailors, so we're gonna stop buying your bonds." That is when the US will have a major meltdown. No one in office today is pushing huge (as a group) to stay within our budget. Link: https://www.cbo.gov/topics/budget

Current budget deficit is over $800 billion. While China isn't funding all of that, its contribution is substantial. What would be worse is if China started selling some of its over $1 trillion in US bonds. This could cause panic selling by other nations. Our markets could suffer severe damage.

I still contend that the fear of a President Trump running amok will bring China to the table on concessions he wants, because no one knows where he will stop if he doesn't get what he wants. If this isn't a planned strategy, yuk.

Regards,

Doug

 

[Kutnupe14]

Actually, if a true trade war breaks out we all lose - YUGE! Yes, the US buys a helluva lot more from China than China buys from the USA, except for one thing - treasury bonds!

If/when China says, "Ya know, you already owe us a butt-ton of money, and are spending like drunken sailors, so we're gonna stop buying your bonds." That is when the US will have a major meltdown. No one in office today is pushing huge (as a group) to stay within our budget. Link: https://www.cbo.gov/topics/budget

Current budget deficit is over $800 billion. While China isn't funding all of that, its contribution is substantial. What would be worse is if China started selling some of its over $1 trillion in US bonds. This could cause panic selling by other nations. Our markets could suffer severe damage.

I still contend that the fear of a President Trump running amok will bring China to the table on concessions he wants, because no one knows where he will stop if he doesn't get what he wants. If this isn't a planned strategy, yuk.

Regards,

Doug

I doubt China will come to the table. If it does, it will be because overtures to US "allies" have been rejected. The same allies that Trump is also waging trade wars against. It is in the best interest of both China and our European "allies," to draw closer together, to present a united front against the tariffs. If I was China, that's what I would do. If I was a US "ally," that's what I would do.

 

[BugI02]

I doubt China will come to the table. If it does, it will be because overtures to US "allies" have been rejected. The same allies that Trump is also waging trade wars against. It is in the best interest of both China and our European "allies," to draw closer together, to present a united front against the tariffs. If I was China, that's what I would do. If I was a US "ally," that's what I would do.

That's essentially saying the sheep should "draw closer" to the wolf in order to keep the sheep dog at bay. If they're that stupid, maybe we'll save their ass again and maybe not

 

[BugI02]

Actually, if a true trade war breaks out we all lose - YUGE! Yes, the US buys a helluva lot more from China than China buys from the USA, except for one thing - treasury bonds!

If/when China says, "Ya know, you already owe us a butt-ton of money, and are spending like drunken sailors, so we're gonna stop buying your bonds." That is when the US will have a major meltdown. No one in office today is pushing huge (as a group) to stay within our budget. Link: https://www.cbo.gov/topics/budget

Current budget deficit is over $800 billion. While China isn't funding all of that, its contribution is substantial. What would be worse is if China started selling some of its over $1 trillion in US bonds. This could cause panic selling by other nations. Our markets could suffer severe damage.

I still contend that the fear of a President Trump running amok will bring China to the table on concessions he wants, because no one knows where he will stop if he doesn't get what he wants. If this isn't a planned strategy, yuk.

Regards,

Doug

Meh, they can stop buying new ones, but the ones they hold are not callable - even by us. The fact that in the financial crash of 2008-09 many countries were parking funds in the US at negative interest rates tells me they still know who will be the last country standing. The tougher the financial times, the easier it will be to sell our bonds; and if interest rates go up and we have to get our fiscal house in order that would not necessarily be a bad thing either

Plus we offer a little thing the Chinese don't, the rule of law

 

[BehindBlueI's]

Agricultural, automotive, and energy industry so far. US soybeans got hit with a 25% tariff, while tariffs against other nations (like India) got dropped or lowered.

There's speculation India will buy US soybeans and then sell them to China to bypass that particular tariff....

https://www.nbcnews.com/news/china/china-deploys-army-farmers-tit-tat-trade-war-u-s-n888951

China is aiming to boost domestic production of soybeans by calling on its vast army of farmers to expand soybean acreage and offering greater subsidies to growers... announced zero tariffs on soybeans from India, Bangladesh and other Asian countries....Beijing is the biggest buyer of U.S. soybeans, importing some $14 billion last year

 

[BugI02]

So underwriting Belt & Road and Made in China 2025 with our own money (trade deficit) is somehow preferable?

 

[BugI02]

"There's speculation India will buy US soybeans and then sell them to China to bypass that particular tariff...."

So why not sell to India at 10% over market price, they can then turn and sell to the Chinese for +20% over market and still come in under the tariff price. Win-win

 

[BehindBlueI's]

So underwriting Belt & Road and Made in China 2025 with our own money (trade deficit) is somehow preferable?

If that's addressed to me, I can only assume you haven't read or have forgotten my other posts in this thread. Facts are facts, regardless of what we prefer to happen, and this is fact showing one aspect of the tariffs being batted back and forth.

"There's speculation India will buy US soybeans and then sell them to China to bypass that particular tariff...."

So why not sell to India at 10% over market price, they can then turn and sell to the Chinese for +20% over market and still come in under the tariff price. Win-win

Because commodity prices don't work that way. Unless supply or demand change, price is relatively consistent and we aren't the only supplier out there. There's also risk to the Indian import/exporter as China could shut the door with tariffs against India if they choose, and as shown China is trying to increase domestic suppliers.

 

[BugI02]

So, then, are you saying the soybean farmer gets the same price whether he sells to China directly or to China via India? If the volume is the same, where is the harm?

I've been doing a cursory goto on other soybean producers. The next two biggest after the US are Brazil and Argentina. Brazil is in the same league but Argentina's production is an order of magnitude less. I'm also finding that Brazilian exports have thirty percent higher shipping costs to China, so they likely pay more than the tariff price would make US beans (hard to tell as beans are slightly cheaper per tonne, then 30% on top of that)

Centrally planned economy; so with the goal being to inflict pain on the US farmers, they can make their buying decision stick. It will be at considerable cost to their economy. If their business people were given a free choice they might still buy from the US at +25%

I still think the Chinese will endure much greater economic pain in this trade war but question the willingness of the US producer and consumer to weather the storm or indeed their commitment to the goal of self-sufficiency. That's the rub

If one's only care is that their [iPhone, motorcycle, clothing etc etc] be as cheap as possible, I expect them to endure any pain with the stoicism of a World Cup soccer player

 

[BehindBlueI's]

So, then, are you saying the soybean farmer gets the same price whether he sells to China directly or to China via India? If the volume is the same, where is the harm?

Maybe. Like I said in the first post I mentioned the possibility, if China wants to they can slam that particular door any time they want. There's more risk and uncertainty to contend with due to that. There's also the fact that China may be unwilling to pay more, and in agriculture the buyers tend to be the price setters (which is why we have agricultural subsidies, but that's moving well beyond the point here). So...dunno.

If it becomes a "patriotism" issue with the Chinese and demand is reduced, that could also affect it. I'm sure the assorted commodities will attempt to flow around the tariffs, it's just difficult to predict how China will react if their tariff doesn't meet their stated goals...and even if their stated goals are their real goals. It could be a face saving measure to look like they are retaliating but "accidentally" leave a backdoor open. So...again, dunno.

I don't speculate on commodities futures, but if you want to know what the big boys think is going to happen, watch the futures market. Futures are up a bit over the last few days, so that say the folks who study this sort of thing for a living are optimistic through at least this fall.

 

[wagyu52]

China consumes about 70% of the worlds soybeans. US and Brazil account for 80% of the worlds production split about 50/50, Argentina is a distant third with around 15% and China forth around 10%.
All that said, no way China can make up the US imports by growing domestic soybeans. China will have to continue buying US soybeans.
Two other things working against China,
1 Brazil infrastructure sucks, they are very dependent on good weather to get beans to market and have had problems in the past with filling contracts on time.
2 Argentina is coming off of a drought and their production is down, world production will likely be down this year.

Edit, soybeans went up $0.38 Friday, so that’s good news. All we need is about another $1.25 to be back where we were the end of May.

 

[Thor]

So underwriting Belt & Road and Made in China 2025 with our own money (trade deficit) is somehow preferable?

Yeah, I'm not getting the concept that unfare trade must be continued because it's the way it was. Way past time to stop funding our enemies. The ChiComs are our enemies and they have been playing the west for fools.

 

[BehindBlueI's]

Posted elsewhere, but relevant here as well: https://www.reuters.com/article/us-...-county-into-winners-and-losers-idUSKBN1JZ16X

The graph showing number of workers in each segment vs average wage in each segment is, IMO, one of the most interesting things in the article. The metal segment of the economy pays significantly better, but the agricultural segment employs way more people in total.