Let the trade wars begin

CowpokerCowpoker BabyGroot
Buckle up, might be a bumpy ride

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  • toddterps62toddterps62 RabbleRouser,
    I made so much money on weed today. Thanks, Stock Market.
    Look what you fuckers made me do
  • I only caught a quick blip on the radio this morning, but it sounds like China might be specifically targeting goods that are manufactured in areas with a lot of Trump support?
  • Venkman wrote: »
    I only caught a quick blip on the radio this morning, but it sounds like China might be specifically targeting goods that are manufactured in areas with a lot of Trump support?

    Right now, it's going to suck for a while but bigger picture, it will be fascinating to see how this plays out.

    Until China and the US figure out the steel thing (almost every other country has negotiated the tariff to a lower rate after having to make some compromises of their own), anything manufactured with steel is going to get expensive. The last time we put a steel tariff on (think it was GWB around '02), steel manufactured goods dropped in sales by 15% because the cost went up.

    My opinion, Trump is playing chicken with the Chinese, we'll see who blinks first. The potential problem here is that the global economy needs growth in the Asian economy, we need those markets. Hopefully it will be a mutually beneficial agreement at some point because if China concedes too much, it will hurt their economy and that will ripple throughout the world. I assume Trump is trying to get to a point where there is more balance. China has far more to lose than we do but that doesn't mean that we won't take one on the chin here.

    I mentioned before that Sorghum was the warning shot, the headline for me in the latest round of Chinese imposed tariffs is pork. It's a big one, as Chinese populations continue the upward mobility, move from rural populations to urban, their protein demand has increased. It will ripple through the hog markets, impact soybean (especially soy meal) and will ripple with the corn market as well.

    I'll wait to criticize Trumps approach when the final deal is made or not made for that matter. The GOP rep's and senators are giving Trump an earful, especially in Trump country where it is corn fields and cattle pastures because those folks are under constant pressure. Good news/Bad news depending on your prespective is Trump gives two shits about the political fallout, isn't going to buckle under pressure if a handful of GOP'ers are at risk of losing their seats. His focus seems to be on negotiating a better deal and that is good/bad again depending on if you are feeling the effect of the trade war and if you believe that there will be a light at the end of the tunnel. As of now, I think there is an opportunity that we come out of this with a better deal than TPP, also think that NAFTA may be a better deal than the original.

    It is sort of like a union strike, both sides negotiate and a threat of a strike or lockout isn't as effective unless the sides are willing to play it out once in a while.

    As far as food goes, South America can handle the increased production in soybeans but they do not have the infrastructure to logistically get it to Asia. China needs the US and the US needs China and the rest of the world badly needs both to be mutual business partners.
  • The discussions are good. Hogs are down, cattle are down, corn and beans saw a price jump following the latest USDA report that shrunk ending stocks and lowered the acreage estimates for 2018.

    It is the brilliance that is ethanol and biofuels. Both the domestic ethanol crush and corn used for feed in the US is higher than the total amount of corn traded in the entire globe in a single year. It provides a level of market security and negotiating leverage that wouldn't exist without us having the infrastructure to create value added products and continually use the raw products every single day and convert them to a valued commodity. It doesn't mean that having no exports to China doesn't negatively impact the market but it does mean that our markets can survive it.

    The other source of leverage, foreign consumers have developed a taste for US product. China can grow corn, not near the quality the US has. China is huge in pork production, can not produce enough soy or corn to produce pork efficiently. Japan puts a 43% tariff on US beef but we are still struggling to meet the growing demand for high end beef products in Japan. When compared to the rest of the world, we deliver a vastly superior end product, and do it much more efficiently than anyone else in the world. Some exceptions being how Russia has done in the Wheat market, the world sanctions actually devalued their currency to the point where nobody else could compete with the cheap cost of Russian wheat. Argentina grows better soybeans, they also have the infrastructure to get them to the global market at a more reasonable rate than the US but are also facing a severe drought this year.

    Trump knows he is holding a lot of cards, my only fear here is that he over plays his hand.
  • primateprimate RabbleRouser
    I made so much money on weed today. Thanks, Stock Market.

    I am so pissed I didn't jump on this years ago.
  • Cowpoker wrote: »
    The discussions are good. Hogs are down, cattle are down, corn and beans saw a price jump following the latest USDA report that shrunk ending stocks and lowered the acreage estimates for 2018.

    It is the brilliance that is ethanol and biofuels. Both the domestic ethanol crush and corn used for feed in the US is higher than the total amount of corn traded in the entire globe in a single year. It provides a level of market security and negotiating leverage that wouldn't exist without us having the infrastructure to create value added products and continually use the raw products every single day and convert them to a valued commodity. It doesn't mean that having no exports to China doesn't negatively impact the market but it does mean that our markets can survive it.

    The other source of leverage, foreign consumers have developed a taste for US product. China can grow corn, not near the quality the US has. China is huge in pork production, can not produce enough soy or corn to produce pork efficiently. Japan puts a 43% tariff on US beef but we are still struggling to meet the growing demand for high end beef products in Japan. When compared to the rest of the world, we deliver a vastly superior end product, and do it much more efficiently than anyone else in the world. Some exceptions being how Russia has done in the Wheat market, the world sanctions actually devalued their currency to the point where nobody else could compete with the cheap cost of Russian wheat. Argentina grows better soybeans, they also have the infrastructure to get them to the global market at a more reasonable rate than the US but are also facing a severe drought this year.

    Trump knows he is holding a lot of cards, my only fear here is that he over plays his hand.

    you know more about this game than I do, so help me understand something:

    sure, it would be nice to bring back steel manufacturing to the country, but aren't there a lot more people employed in industries that USE steel as opposed to those who MANUFACTURE it here? and if so, isn't it then better for our overall economy to be able to buy it as cheaply as possible?

    in other words, sure, these tariffs could lead to more steel being produced here, but won't that raise the price, hurting the industries that use it?
  • primateprimate RabbleRouser
    Venkman wrote: »
    Cowpoker wrote: »
    The discussions are good. Hogs are down, cattle are down, corn and beans saw a price jump following the latest USDA report that shrunk ending stocks and lowered the acreage estimates for 2018.

    It is the brilliance that is ethanol and biofuels. Both the domestic ethanol crush and corn used for feed in the US is higher than the total amount of corn traded in the entire globe in a single year. It provides a level of market security and negotiating leverage that wouldn't exist without us having the infrastructure to create value added products and continually use the raw products every single day and convert them to a valued commodity. It doesn't mean that having no exports to China doesn't negatively impact the market but it does mean that our markets can survive it.

    The other source of leverage, foreign consumers have developed a taste for US product. China can grow corn, not near the quality the US has. China is huge in pork production, can not produce enough soy or corn to produce pork efficiently. Japan puts a 43% tariff on US beef but we are still struggling to meet the growing demand for high end beef products in Japan. When compared to the rest of the world, we deliver a vastly superior end product, and do it much more efficiently than anyone else in the world. Some exceptions being how Russia has done in the Wheat market, the world sanctions actually devalued their currency to the point where nobody else could compete with the cheap cost of Russian wheat. Argentina grows better soybeans, they also have the infrastructure to get them to the global market at a more reasonable rate than the US but are also facing a severe drought this year.

    Trump knows he is holding a lot of cards, my only fear here is that he over plays his hand.

    you know more about this game than I do, so help me understand something:

    sure, it would be nice to bring back steel manufacturing to the country, but aren't there a lot more people employed in industries that USE steel as opposed to those who MANUFACTURE it here? and if so, isn't it then better for our overall economy to be able to buy it as cheaply as possible?

    in other words, sure, these tariffs could lead to more steel being produced here, but won't that raise the price, hurting the industries that use it?

    Steel mills are hot dangerous places to work. Good luck with staffing them via today's workforce. Wages will have to be higheven by US standards to retain employees making US steel even more expensive than it is. Added to that will be a lessened demand due to the addition of production making foreign steel even cheaper.

    The tarrifs are just a lever. The real intention can't be to ramp up production of US steel. If that was the goal, the buy American and LEED project credits could be modified to be a better domestic lever instead of being mainly lip service like they are now in terms of steel.
  • primateprimate RabbleRouser
    I forgot to add the fact that US steel is often inferior due to recycling requirements. Fine for some things, but not worth using for others.
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