Following President Trump's Tariff announcements on China, China has naturally decided to engage in action for their own financial benefit as a country. This attempt to improve the trade policy and relationship between the United States and China is starting to backfire on the U.S. agriculture industry. China's first action of protectionist response was to increase soybean purchases from Brazil, (where the crop is cheaper than in the U.S). Resulting from that shift, China is now buying less
American soybeans. When asked about their decision to makes this move, they responded by saying that is in response to the recent steel and aluminum tariffs. This type of rogue protectionist trade policy should be watched closely as the role of globalization in today's markets are more prevalent than ever before. Markets are on edge following this recent Chinese response.
https://www.wsj.com/articles/for-u-s-farmers-china-tariffs-timing-is-harsh-1521979200
3 comments:
While I was unsure about the industry, it seemed fairly straight forward that China would respond to Trump's tariffs with their own. The Trump administrations short sighted view of the benefits of these tariffs will have dramatic long term impacts on the state of the US economy as a whole.
There are countless industries like the American soybean industry that will suffer as well due to Trump's hasty tariff decisions against China. Soybeans are just one example of the many crops and products that are American made and now have to suffer the consequences on the market. Trump advocates that he supports American industry but his policies prove to be doing the very opposite.
This is just the beginning of a trade war, that will potentially end up harming everyone involved. Everyone was expecting to see what China's response was going to be to the tariffs on steel and aluminum, and this might just be the first, they could be looking at many other industries and might end up hurting many industries in the US. The only way that this war will end, is if the US stops targeting China and their industries because they will keep responding, as Trump and his administration keep trying to attack them. Only time will show if Trump took the right decisions, and if they actually benefited the US, or if they ended up harming the country more than they benefited it.
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