News trade war
Trade war approaches new chapter
The trade war between the United States (US) and China is approaching a new chapter. US President Donald Trump has approved new sanctions against China. China is likely to impose levies on this, including on soybeans. The European Union (EU) also intends to take countermeasures.
On Friday, June 15, the US government published a new list of goods subject to tariffs (worth $50 billion). China is considering countermeasures; the government already this week threatened with renewed tariffs of 25% on soybeans and pork from the US. A few weeks ago, the trade war seemed fizzle but that is no longer the case now.
Trump Country
In the 'Midwest' of the US, developments are followed with fear and trembling. The American Soybean Association, which represents more than 300.000 producers, this week made an urgent appeal to Congress to end the trade war. Soybean producers are predominantly from states such as Iowa, Illinois, Minnesota, Nebraska, Indiana, Ohio, and North and South Dakota. Precisely these are the states that are labeled as 'Trump Country' by the American media. Yet Trump does not seem sensitive to the appeal of his farmers' supporters. He even claims that it will make them better in the long run.
Meanwhile, US pig farmers have already been hit by a levy from China en Mexico† Quite a few of them also produce soybeans. This means that sales to these companies are in danger of being squeezed on all sides. The soy price the CBoT in Chicago is now almost at its lowest point in 10 months. The pig price is also at low levels. American farmers don't have much fat on their bones; after all, the past few years have gone down in the books as lean (grain) years.
EU shoots live
The EU is also considering targeted countermeasures after the US launched tariffs on steel and aluminum from Europe at the end of May. For example, European government leaders approved this week a plan to levy on American goods, worth €2,8 billion.
For example, there will be taxes on products such as jeans, fruit, whiskey and motorcycles. This targeted retaliation is intended to hit the Trump supporters in their wallets. The European Commission has yet to adopt the measures. It will meet in Brussels on Wednesday 20 June to vote on this.
Wouter Job
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