Keith Good

Don Lee reported on the front page of Saturday’s Los Angeles Times that, “The tariffs that the United States and China slapped on each other’s exports Friday intensified a trade battle that has a strong risk of roiling financial markets, chilling consumer confidence and seriously harming the global economy…Soybeans topped the list of newly taxed items— and they illustrate how deeply U.S. and Chinese producers and consumers have come to depend on each other.”

Bloomberg writer Andrew Mayeda reported Thursday that, “President Donald Trump is preparing to slap tariffs on Chinese goods early Friday, the first shot in a trade war between the world’s two biggest economies. Tariffs on $34 billion of Chinese goods are scheduled to take effect at 12:01 a.m. in Washington, the U.S. Trade Representative confirmed in an email Thursday. The milestone marks a new and damaging phase in a conflict that has roiled markets and cast a shadow over the global growth outlook.”

News articles over the past several days have highlighted heightened U.S. trade policy risks and recent declines in the price of corn and soybeans.  Farm state Senators expressed their concern regarding executive branch trade policy, and its impact on the U.S. agricultural sector, to Commerce Secretary Wilbur Ross at a recent Finance Committee hearing.  Meanwhile, Secretary of Agriculture Sonny Perdue indicated in a recent opinion column that, “The U.S. has to stand up to China’s abusive trade practices like intellectual property theft.  And we won’t leave farmers to face Chinese bullying alone.”

In conjunction with positive early season crop condition ratings, an ongoing and escalating trade dispute between the U.S. and China put negative pressure on corn and soybean prices Tuesday.  Meanwhile, The Wall Street Journal indicated that the administration is ‘working on measures that will have the backs of farmers,’ as the trade dispute unfolds.  Separately, farm state lawmakers stressed the importance of global markets for agricultural producers, who have already been struggling with lean farm income.

Bloomberg News reported on Friday that, “Trade tensions between the U.S. and China ratcheted higher after the Asian nation said it will follow through on plans to levy tariffs on a range of American farm goods including soybeans and corn.”

Over the past several days, the U.S. Department of Agriculture has released a handful of updates relating to U.S. agricultural trade.  The recent information includes updated projections for fiscal year 2018 agricultural exports, as well as the latest monthly trade data.  As trade policy uncertainty persists, today’s post provides a brief overview of the recent trade information.

Towards the end of May, positive news regarding U.S. trade policy began to emerge for U.S. farmers: China canceled its anti-dumping measure on U.S. sorghum imports; the U.S. issued a  joint statement indicating that China would purchase more U.S. exports, including “meaningful increases” in agricultural products; and, the U.S. suspended its threat to impose tariffs on $150 billion in Chinese imports while negotiations with China continued.  However, more recent trade developments appear to be less sanguine for U.S. farmers and ranchers, which is the subject of today’s update.