US soybean farmers say China tariffs could result in 'serious damage'

Frederick Owens
July 11, 2018

"We have to be aware that we are only one tweet away from much broader tariffs becoming a reality", she said, adding that investors were trimming broad exposure to riskier assets.

Nancy Johnson, executive director of the North Dakota Soybean Growers Association, said prices have dropped in the past month, but "we typically are not selling a large number of soybeans at this time of the year".

Chinese state-run media reported that Beijing's measures against Washington formally took effect at 12:01 p.m. on Friday at the same time as the United States activated its tariffs against China. "The math is simple. What we will likely see happen in the short-term is apples that were destined for export markets will instead overhang the USA market", she said.

Benchmark 10-year Treasury notes last rose 7/32 in price to yield 2.8145%, from 2.84% late on Thursday.

The tit-for-tat trade showdown has already impacted soybeans farmers in the Midwest.

Trump started the war but it is unclear how he envisages it ending without China volunteering to both significantly damage its own economy and its leadership suffering humiliation in the process.

US President Donald Trump, who has claimed that winning a trade war would be easy, has said that he is prepared to drastically raise tariffs on more Chinese imports.

"We need this Administration to end the trade war and to open new markets so farmers can get back to doing what they do best: selling made-in-America ag products across the globe", it added.

There are already signs within the U.S. that companies are pausing decisions on investment and hiring and input costs flowing from the earlier increase in duties on steel, aluminium and washing machines are flowing through to higher end-prices.

After that, the hostilities could intensify: Trump said the ready to target an additional $200 billion in Chinese imports - and then $300 billion more - if Beijing does not yield to USA demands and continues to retaliate.

The administration has placed "these import taxes squarely on the shoulders of manufacturers and, by extension, consumers", Souhrada said.

More news: Trump administration announces $US200 billion in extra China tariffs

China may start limiting the number of big-spending tourists and its 350,000 students that head to the United States each year, which would have a big impact on the American market.

"This will impact growers coast to coast", Grondine said. Bobcat's raw material costs have also risen because of the administration's steel and aluminum tariffs. China has also brought a suit against the USA over the imposed tariffs in the World Trade Organisation on Friday.

Daimler, the carmaker behind Mercedes-Benz, already warned last month that its profits will fall this year.

Terming the manufacturing of flags for Trump's 2020 bid as "completely normal", he said, "That is trade".

A spokesperson for the Alliance of Automobile Manufacturers said in an email Friday that some USA carmakers may not feel a major impact right off the bat. The Peterson Institute for International Economics shows that nearly two-thirds of United States imports from China come from companies with foreign capital, another avenue through which USA tariffs targeted at China have an impact beyond its borders.

They said they would, and they did. American officials worry U.S. industrial leadership will be eroded by Chinese plans to create tech champions in fields including robotics, biotech and artificial intelligence.

"Trade war is never a solution", Chinese Premier Li Keqiang said at a news briefing with Bulgarian Prime Minister Boyko Borissov in Sofia before a summit with 16 central and eastern European countries.

U.S. Customs and Border Protection officials are due to collect 25 percent duties on a range of products including motor vehicles, computer disk drives, parts of pumps, valves and printers and many other industrial components.

"The Trump administration is confronting Beijing for tactics like stealing U.S. technology", Rhonemus noted.

Correction: An earlier version of this article misstated the number of top soybean producing states that voted for Hillary Clinton in the 2016 election.

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