American Farmer Is the Casualty of Trade War
It was somewhat of a panic week across American farmers with tariff announcements exchanged back and forth across the Pacific between the United States and China, shaking markets and showing the importance of trade policy to pocketbooks in rural America.
Early in the week, China announced its response to steel and aluminum tariffs issued last month by the United States. It was an additional 15 or 25 percent, effective immediately, on an array of goods worth a total of $3 billion, including U.S. ethanol (at 15 percent) and U.S. pork (at 25 percent).
On Tuesday, the United States announced a new set of tariffs on Chinese products only, totaling approximately $50 billion. That action would levy 25 percent, mostly on tehnology products.
China reacted quickly with its counter of 106 categories of imported items facing 25 percent tariffs when the new U.S. policy is in place, including sorghum, corn, distiller's dried grains with solubles (DDGS), beef and soybeans.
The announcements have had a direct impact on feed grains in all forms, including corn, sorghum, DDGS, ethanol, pork and beef exports. Overall, the health of the broader U.S. ag economy, including soybean demand.
Commodity markets were unsettled, and farmers are concerned as they head into the fields for the new crop year. It is ultimately important for the two largest economies in the world to come together in agreement.
Ninety five percent of the world’s consumers now live outside of the United States, increasing prosperity and population growth mean more demand for the products we are selling. The United States remains the most innovative and robust agricultural producer in the world.
Source: U.S. Grains Counsel