the trade war has entered into actual tariffs with more promised
However, a window of opportunity has been left open for negotiation to happen, although it seems no negotiations are happening as of now
What effect do you think will happen to both china and the USA
USA sells less to china than china sells to USA, but china is currently exploring different ways to retaliate against USA possible complete tarrifs on all Chinese exports into USA
There are many different twists and turns ahead
What do you think will happen
China will capitulate. They are in a no win situation. They need the US export business. But the US isn't going to move forward without a move even trade agreement. Steel industries are already hiring and reopening shuttered plants.
I think china is well aware of the export surplus, at least as long as Trump was on the campaign trail for president
I am sure they studied Clinton just as closely, but maybe for different things
China seems to always be prepared
If I was China I would look for USA weakness
Trump is obviously looking for Chinese weakness
China is already causing import duties, inspections etc. at ports to move in slow motion
China is taking stock of the USA companies that operate in china
I think that USA/chinese business, inside china, is close to 1/2 of Chinese exports to USA, and you can bet that some day soon, the USA citizen that is being asked to pay a little bit more or sell for a little bit less will run out of patience
When the pocket book is hurt, people tend to complain and eventually make demands to turn this ship around
So far the citizens have been very patient
They know what Trump is doing and saying is correct, thus the citizens will stick with Trump
However, if the stk market suffers large losses, will the folks continue to be patient
What happens if pension money dries up if the market fails to pay dividends
Ivanka does business with china labour and sells goods into the USA as one example of many, iPhone sales in china could be halted, the list is very long of who would be hurt if china stops outside investment in china
They could devalue their yaun but that might cause china as much pain as the USA as outside capital could buy more assets inside china for the same cost, unless china stops outside investment, which might happen
China could sell their treasury bills
China is working very hard on the silk road, which would open up different markets, plus has been working to open up agriculture production in Africa
Of course the one thing we don't want is a hot war in the south china seas, but as a diversion this would be a major event with no idea the out comeChina has many tools to use other than just amount of goods shipped to the USA
China has known this for some time and has been making preperations
What kind of plan B does Trump have if he goes all the way and puts tariffs on all Chinese import goods and services, but china is willing to stay the course
China didn't just fall off the turnip wagon
Methinks if things go all the way a recession will happen and high odds of a depression
My son buys steel from those USA steel mills and he says either rampant inflation or depression as steel prices ramp up
Other goods will also ramp up thus the need for higher wages
Inflation would be my bet vs depression, as the Fed prints money
Of course somebody could decide the time is ripe for socialism
I am sure many will disagree with me
I would be very interested in your thoughts as this trade war is real and today, and markets are taking things seriously
Many mutual funds have had heavy redemptions
No more head in the sand
I should have clarified
Recession or depression if the Fed maintains the
status quo
Inflation if the Fed prints money
About time. We have nothing to lose. 155 million jobs lost. Let's bring 100 million of those jobs back to America. Still if that were to happen, 55 million jobs lost to China. Finally someone in our corner.
Maybe we should tell China we will not sell them any more food. I bet that gets their attention. Dig in your heals and stay the course Trump.
By raising the tariffs on China, it might make American producers more attractive. And also protect against the violations of intelectual property rights.
"maybe we should not sell them any more food"
China has already stopped all purchases of soybeans
What do we do with the surplus grain if we stop selling to china
Our price of grain has fallen and the farmer takes the biggest hit
So what? Who are they gonna buy their food from? We already know that they can't produce enough to feed themselves. So if not from us, then it has to be SA.
Watching prices fall the fastest and farthest since I've been trading has got to make producers sick.
It's been a double whammy with very high crop ratings and forecast for massive, record yields on top of the very negative price war with China. As you know, price moves often go to an extreme when speculators.........like the huge funds feed them and use momentum and other indicators to push things in the same direction.........well beyond what value based on fundamentals dictates.
Corn is probably undervalued here as it should not be effected that from the China trade war. THe USDA report on Thursday was incredibly bearish for beans, with US ending stocks increasing by 200 million bushels but prices below 10 year lows probably dialed that in.
August weather for bean pod fill(and corn kernel fill) is still important.
“Strong earnings and the U.S. economic growth unfortunately are being offset by heightened uncertainty due to rising protectionism and potential barriers to the open markets and free trade that have been for years supported global economic growth and the expansion of international markets. These circumstances are impacting markets, exchange rates and global capital flows,” he said."
There is going to be some short term pain. But how else do you begin to turn the trade picture around. Trade negotiations? First president in 4 administrations. Its for your grandchildren.
Adding lots of fuel to the selling has been excellent weather and crop ratings.
Crop ratings dropped a bit more than the market expected -2% beans, -3% corn, so we had a bounce today.
Maybe we put the lows in earlier than usual this year. Crop ratings have peaked for sure but they usually deteriorate during July/August as soils dry out seasonallly and the crop does not look as green.
The rains coming up later this week will help determine where we go.
If they are less than expected like this last round, we can go higher.............or if the current cool outlook shifts to hot, we WILL go higher.
More rains and cool temps will have the opposite effect.
We had an 80% chance of rain in my neck of NE Ohio. I sat under a tree for about 10 minutes during a brief shower. I didn't even really get wet. And that was it.
It's been hot and dry. Day after day after day. The corn was looking great, but now....not as great. I had mentioned a field I pass on the way to and from work about a week ago? Tassles, green full. Yesterday I looked a little harder, leaves rolled and considerably "drier" looking.