China launches tariff on soybeans

The Chinese government announced on Wednesday 4 April that it would impose new import tariffs on 106 products from the United States (US). This also includes soy, airplanes and cars; collectively worth $50 billion. It is the next step in the trade war between the two countries.

After the disclosure (April 2) of the package of Chinese import tariffs, traders and analysts breathed a sigh of relief. The most important export products: soya, airplanes and cars were spared. However, a number of new measures followed on Wednesday 4 April.

The new measures confirm import tariffs of 25% on US soy, vehicles, aircraft, chemicals and luxury products (whiskey and cigars). Beef from the US is also taxed extra, after this happened with pork before.

Response to Trump
This response follows US President Donald Trump's announcement that he is working on a new package of import tariffs. This is because the Chinese are violating the intellectual property of goods from the US. China is hitting back now, before Trump can. In total, the US is investigating possible tariffs on 1.300 products from China.

The Chinese finance ministry will hold a press conference on Wednesday morning in response to the measures. Deputy Finance Minister Zhu Guangyao says it does not want to provoke a trade war between China and the US. He only knows losers. According to Zhu, China would like to reach an agreement with the US. According to the Chinese, intimidation and pressure will not work.

Loss on CBoT
On the CBoT, the soy contract closed with a small profit on Tuesday, April 3, as did corn and wheat. After the announcement of the news on Wednesday morning, the soy market was immediately hit. The price fell by more than 1% in 4 hour.

Niels van der Boom

Niels van der Boom is a senior market specialist for arable crops at DCA Market Intelligence. He mainly makes analyses and market updates about the potato market. In columns he shares his sharp view on the arable sector and technology.

n.vanderboom@boerenbusiness. Nl

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.