Analyst: Unclear If Markets Have Priced In Trade War, Story Continues

June 18, 2018 10:28 AM

Markets are going to be watched extremely closely this week as president Trump plans to put tariffs of up to 25 percent on $50 billion of Chinese goods in a response to alleged intellectual property theft by China.

According to U.S. Trade Representative Robert Lighthizer, the first round of tariffs will be implemented on July 6. A total of 818 items worth $34 billion will be the first impacted. 

The other $16 billion in goods could take effect after a review and public comment process.

Beijing took a shot back at the U.S., announcing its own plans to place 25 percent tariffs on U.S. products including soybeans, beef, orange juice and whiskey on July 6.

That promise created nervousness in the commodity markets Friday, causing grain prices to plummet before recovering later in the day.

“This appears to me to be a very classic buy the rumor, sell the fact scenario,” said Joe Vaclavik, president of Standard Grain. “The rumor here was that Trump would impose tariffs. The fact is that in fact he did.”

According to Vaclavik, the markets could continue to drop this week as China released its list of retaliatory tariffs.

“The farm community may be willing to take a black eye—they’re not willing to take a broken arm,” said Brian Kuehl, executive director of Farmers For Free Trade. “It really comes down to how much is going to get done.”

Hear about the help the USDA is trying to offer farmers during this time on AgDay above.

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Spell Check

Augusta, ME
6/19/2018 08:32 AM

  Fake news? The absolute biggest source of it is from trump's mouth and his fingers via the twitter app!!!!

Kathleen Chenault
Rockville, MD
6/18/2018 11:32 AM

  Regarding the comment that farmers will only take so much, what will they do? These Trump policies, driven by bellicose talk and bullying behavior, are devastating so many -- from farmers, through rural based-businesses, to people like me, still involved in family farm operations in my home state of Nebraska. Time to prepare a retaliatory strategy to make Trump and other elected officials pay for disregarding -- yet again -- the impact of their ruinous policies on rural America. They won't act in the interests of the ag economy unless they are forced to do so. Demand change and vote accordingly if we don't get it NOW. We've worked too long and hard to develop foreign markets for our grain to see it all evaporate because of disregard from our alleged leaders.

Steve E
Lubbock, TX
6/18/2018 04:21 PM

  Well said Kathleen. However, one must ask, how on earth did they (farmers) vote for Trump in the first place? He has mistreated anyone that ever did business with him, knows nothing about history and is generally unwilling to listen to anyone including his own cabinet members. Trade is the life blood of modern farming and ranching. Trump does not really care as long as in his mind he "wins" even as everyone else loses. This is not going to end well for farmers or anyone else.


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