Tariff War

PUBLISHED: 9:37 PM 9 Apr 2018

Tariff War Between U.S. And China Affecting Trade, Others Scooping Up U.S. Soybeans

Experts say this will hurt some and help others.

President Donald Trump threatened to increase tariffs and disrupts the Chinese soybean supply.

Trade tensions have been on the rise with China. As the president continues to enact free and fair-trade policies against the country, the leftist liberals have been screeching about threats to increase tariffs which fell flat this week.

Leftists are caught crying wolf as basic economics elude the average never-Trumpers. One of the most important dietary groups to liberals, the soybean, has become a contentious topic in Washington.

President Donald Trump previously threatened to add $100 billion in tariffs on China. In the ongoing campaign to level the playing field with the economic powerhouse of China, the president has not been shy in declaring increased tariffs over a list of consumer goods.

After the president floated the suggestion of adding tariffs to Chinese exports, Beijing threatened to add increased taxes on American soybean exports. Their threats failed miserably.

Chinese companies immediately began purchasing large quantities of soybeans. Worried about the potential tax increase to imported goods, China is experiencing historic highs in soybean imports.

Beginning the buy shortly before the scheduled harvest, China is influencing the global supply of soybeans. Because of the actions in the Orient, European markets have begun to secure their own horde of soybeans.

Without signing any legislation, the president was able to create a brand-new soybean market.

According to a report released on April 6, the United States Department of Agriculture (USDA) identified new trends from the European market originating from the threats of tariffs.

China is the world’s largest consumer of soybeans, buying two of every three beans sold globally. The bulk purchasing demand of grain from the world’s largest exporter, Brazil, resulted in the price of the beans to increase with the growing scarcity.

The United States is the second largest producer of soybeans. American soybeans were priced comparatively on sale on the international market.

According to the USDA report from Friday, much of the analytical information points to one of the biggest purchases made by the European Union in more than 15 years. Taking advantage of the market, several new companies have been created based solely on the price of American soybeans.

Nations like the Netherlands and Germany appear to be some of the largest buyers of soybeans in the European trading bloc. Although the report does not name who purchased the goods, shipping information suggests the 458,000 tons of American soybeans are going to processors within the European Union.

Because the rhetoric of President Trump is driving up the price of Brazilian grains, American cultivated goods are competitive once more on the global stage.

Analysts also suggest American shipping companies based in the Gulf of Mexico will see increased business from the threat of tariffs.

Soybean exports from Brazil peaked at an astounding 200 cents over the standard stock price per bushel. Currently sitting at 170 cents, the Brazilian exports are almost double the price of American beans sitting near 90 cents a bushel above futures.

The current season for soybeans in Brazil is scheduled to ship between May and July. In the northern hemisphere, American production tends to be at a low during the Brazilian peak.

Because of the increase in price to the Brazilian beans, the president is able to provide American producers with year-round work and continued business.

Experts believe the massive European purchase is the first in many trade anomalies to come arising from the threats and actions of President Trump. The short-term shift in global trade could be used as a bargaining tool in negotiations with China.

Aiming to produce an even playing field in the trade with China, President Trump forced Chinese president Xi Jinping to shoot his own foot. Trying to mirror the tough rhetoric of President Trump, the threats made by the Chinese leader backfired and increased domestic prices.

President Trump tweeted about the unfair trade policies of China on Monday. Showcasing the unfair practices permitted by the World Trade Organization (WTO), the president pointed to the discrepancies between automobile tariffs.

When China sells a car in America, the president tweeted, China pays a tariff of 2.5 percent. When America sells a car in China, the president continued, America pays duties upwards of 25 percent.

President Trump is making America great once again by providing for the farmers and forgotten people of middle America. Making China eat their words, the president may have been right when he declared trade wars to be easy.