All errors should be reported to DonSurber@gmail.com

Tuesday, April 17, 2018

Oh, hurt us some more, China. Part II

After China slapped tariffs on soybeans, I posted, "Oh, hurt us some more, China," which pointed out this drive soybean prices up. To avoid the tariffs, Chinese importers switched to Brazil soybeans. That raised prices as Europe started buying more of our soy.

Sorghum farmers (feed for livestock) felt left out.

Not anymore!

Today, China slapped a 179% tariff of sorghum, nearly tripling the price.

This in turn will make pork, chicken, and beef more expensive in China

Soybean futures prices in the United States shot up. It is likely this will work its way to higher prices for farmers.

Woo-hoo.

Raising prices on food makes no sense because China cannot feed itself. That has been the case throughout my lifetime. World-Grain.com has a good article on China's appetite for sorghum.

Back in the day, that did not matter. Mao could get away with starving 50 million people. Hunger happens, right?

But Chairman Xi cannot. To dominate world trade (and China does) China has to have competent workers. Hunger ruins that. They already put up with the worst air pollution in the world, and God knows what is in the water.

Between steelworkers being laid off due to Trump's tariffs, and food being more expensive due to Xi's tariffs, things might not be so stable in Red China.

And folks, China is a communist country. Xi is the chairman of China's communist party, which is the largest political party in the world.

"Sometimes markets react in ways you don’t expect, and that appears the case today. The U.S. and China opened a new front in their trade disputes overnight. A few hours after the U.S. banned technology exports to a Chinese telecommunications company, China announced a preliminary ruling in its anti-dumping case against imports of U.S. sorghum, slapping a stiff penalty against shipments. But markets from stocks to soybeans are higher today nonetheless. Chinese grain price surged on the news, taking U.S. futures higher too, just as traders try to focus on slow planting progress this spring," Farm Futures reported.

Actually, the market acted exactly as it should. Rationally.

Xi is up against the man who wrote "The Art of the Deal."

Trump knows Xi needs him more than Trump needs Xi. If we cut off all trade with China tomorrow, we would see our trade deficit drop by $365 billion a year.

China's trade surplus would drop by $365 billion a year.

Trump knew all this before he engaged Xi. With the war in Korea ending, President Trump does not need to tiptoe around China. He can play hardball.

He is.

By the way, this was why the Dotard wanted Rocket Man to surrender, er, end the war.

9 comments:

  1. A friend on my son is a teacher in Beijing. He told me a few years ago that Beijing is heavily polluted. Said the air never gets above 250ppm--because that's how much the Party allows the papers to print.

    ReplyDelete
    Replies
    1. The weather report in Beijing always says "fog".

      Delete
  2. Xi will learn faster than the liberals here about dealing with PDJT. But only after he had taken a beating or two.

    ReplyDelete
    Replies
    1. I think he is already learning - painfully!

      The 179% sorghum tariff is a clear sign of desperation! Donald was able to play single dimension chess with Xi.

      Delete
  3. "nonetheless"

    Always highly amusing.

    If he knew what he was talking about, he'd have said, "as a result".

    ...and he does this for a living...

    ReplyDelete
    Replies
    1. It is amazing how many who "write for a living" can't. But someone hires and pays these people. And their lack of understanding of language and meaning and even logic is on display daily. Not in Don's columns! -- BJ54

      Delete
    2. My God you Democrats are ignorant. And loquacious. Amusing combination.

      Delete
    3. Lefties have replaced the Age of Reason with the Age of Sneering. One sneer equals ten syllogisms.

      Delete
  4. Pork farmers next up for #metoo. Saw their pols 'anguishing' on the news last night. Will this help them?

    ReplyDelete