This week, President Trump has ordered U.S. Trade Representative Robert Lighthizer to find an additional $200 billion of Chinese goods on which to place tariffs of 10 percent. This would be in addition to the $50 billion tariff on Chinese goods on claims of intellectual property theft.
“It is very unfortunate that instead of eliminating these unfair trading practices, China said it intends to impose unjustified tariffs targeting U.S. workers, farmers, ranchers, and businesses,” Lighthizer said in a statement. “At the president’s direction, USTR is preparing the proposed tariffs to offset China’s action.”
The original $50 billion in U.S. tariffs are expected to go into effect July 6, but commodity markets are suffering from the news as it unfolds.
On news of the Chinese tariffs on U.S. agriculture products, the Dow Jones Industrial Average erased all gains for the year, and so have commodities.
During Tuesday’s trade, soybeans dropped 40 cents before recovering to near $9 levels before the close.
“It’s really scary,” said Carl Wagner III, a farmer from Niles, Mich. “I wish I would have sold more [soybeans] earlier in the winter, but you just can’t predict some of these things.”
“The soybean market traded its lowest level in a spot month contract since December 2008,” said Joe Vaclavik, president of Standard Grain. “The nearby July contracted bottom near $8.41 per bushel, so almost into some fresh 10-year lows.”
If the U.S. publishes the additional tariff list, China’s commerce ministry said it plans on responding, saying threats of additional tariffs violate prior negotiations and consensus reached between the two countries.