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.