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Midwestern farmers brace to lose billions in trade war

TU Curmudgeon

TU Curmudgeon

B.A. (Sarc), LLb. (Lex Sarcasus), PhD (Sarc.)
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From United Press International

Midwestern farmers brace to lose billions in trade war
​

EVANSVILLE, Ind., July 3 (UPI) -- Farmers across the Midwestern United States expect to lose billions of dollars this year if the trade war between the United States and China continues to escalate.

China has threatened $50 billion in tariffs on American exports -- including soybeans and other agricultural products -- beginning Friday. The move is retaliation for tariffs the United States imposed on China to combat "unfair practices related to the acquisition of American intellectual property and technology," President Donald Trump said. Rather than spur China to alter its trade policies, China punched back, putting the two governments in a standoff.

Midwestern farmers are in the crossfire.

"There are issues related to our trade dealings with China," said Grant Kimberley, the director of market development for the Iowa Soybean Association. "Trump's not wrong. But the stakes are pretty high here. We don't want to be the pawn."

The stakes are high because China buys roughly 30 percent of all America's soy. The proposed 25 percent tariff -- which is a tax buyers pay the government to purchase the commodity -- ensures Chinese buyers will look elsewhere.

COMMENT:-

What's the problem?

Why don't Americans just eat more soybeans?

Isn't American industry capable of finding some way of using soybeans to make beer cans so that America isn't reliant on foreign Aluminum?
​
 
TU Curmudgeon said:
From United Press International

Midwestern farmers brace to lose billions in trade war
​

EVANSVILLE, Ind., July 3 (UPI) -- Farmers across the Midwestern United States expect to lose billions of dollars this year if the trade war between the United States and China continues to escalate.

China has threatened $50 billion in tariffs on American exports -- including soybeans and other agricultural products -- beginning Friday. The move is retaliation for tariffs the United States imposed on China to combat "unfair practices related to the acquisition of American intellectual property and technology," President Donald Trump said. Rather than spur China to alter its trade policies, China punched back, putting the two governments in a standoff.

Midwestern farmers are in the crossfire.

"There are issues related to our trade dealings with China," said Grant Kimberley, the director of market development for the Iowa Soybean Association. "Trump's not wrong. But the stakes are pretty high here. We don't want to be the pawn."

The stakes are high because China buys roughly 30 percent of all America's soy. The proposed 25 percent tariff -- which is a tax buyers pay the government to purchase the commodity -- ensures Chinese buyers will look elsewhere.

COMMENT:-

What's the problem?

Why don't Americans just eat more soybeans?

Isn't American industry capable of finding some way of using soybeans to make beer cans so that America isn't reliant on foreign Aluminum?
​
Click to expand...

They voted for him.
 
Sure, countless farmers who voted for trump will be out of a job (and probably out of a house), but hey, those liberal tears will taste amazing.
 
Howard the Duck said:
They voted for him.
Click to expand...

Yup, we'll see how it all works out in the end, but it seems like Trump is handing the Dems an easy win in 2020 so long as they are smart enough to capitalize on it.
 
Howard the Duck said:
Or our friends from Kentucky who hated obamacare but who would riot if Kynect were taken away.
Click to expand...

I agree, but for the record, my post may have been glib but I don't think there's anything remotely funny about it.
 
Agricultural products are commodities. If Canada has a tariff, we sell to, say, Costa Rica and they sell it to Canada. The product doesn't actually ship to Costa Rica, just electronically. It ships to Canada.
 
Waddy said:
Agricultural products are commodities. If Canada has a tariff, we sell to, say, Costa Rica and they sell it to Canada. The product doesn't actually ship to Costa Rica, just electronically. It ships to Canada.
Click to expand...

Nice try.

For some reason the border and customs people seem to think that physical products are arriving at the border they cross and not someplace in some bank's computers.
 
TU Curmudgeon said:
Nice try.

For some reason the border and customs people seem to think that physical products are arriving at the border they cross and not someplace in some bank's computers.
Click to expand...

You have no clue as to how agricultural products, and commodities in general, are traded.
 
Farmers receive billions subsidies. I doubt they're worried.
 
TU Curmudgeon said:
From United Press International

​
What's the problem?

Why don't Americans just eat more soybeans?

Isn't American industry capable of finding some way of using soybeans to make beer cans so that America isn't reliant on foreign Aluminum?
​
Click to expand...
What's the problem?
  • The problem is multidimensional:
    • Dilemma: The nature of the terms of trade rift/inequities between the U.S. and the PRC is such that every trade-restriction-premised solution or mitigation strategy is going to adversely affect some class(s) of Americans, and the U.S. has zero control over what segments of the population will be most or worst affected.
    • "Crossing the Rubicon": The U.S. "way back when" opted to engage in trade with a nation that has a command economy and a billion-plus people. Since the U.S. is capitalist and the PRC isn't, the PRC can insulate its people and producers from the effects of our trade restrictions, but we cannot do the same. The thing is that once we "went there," the only solution that doesn't screw over U.S. producers and consumers is to transfer our purchasing from the PRC to another low-production cost market driven economy. We cannot do that by fiat; China can.
      • Asymmetry:
        • The tariffs we slap on Chinese imports to dissuade or complain about a Chinese government behavior that has nothing to do with the actual products to which the tariffs are applicable. Our big complaint is China's disregard for intellectual property rights. Well, that's a matter of laws and business ethics not production and prices, yet we're "battling" by using trade restrictions. Why? Because there really is no obtainable legal recourse other than trade sanctions.
        • The object of our complaints about China's trade practices -- essentially plagiarism of U.S. producers' designs and methods -- has no real impact on Chinese citizens. Indeed, the extant inequity, as we see it -- giving credit means paying cash for an idea -- abets satisfaction and utility among Chinese citizens.
        • U.S. producers don't make anything that cannot be made, and made with comparable quality and at a lower cost, elsewhere, most notably in the PRC itself, but in other places too. In contrast, the stuff we import from China is imported because we can't profitably produce them at as low a cost as they can be in certain other nations.
        • In response to our tariffs applied to Chinese imports, tariffs that increase prices for our consumers, China retaliates with tariffs against us, and those tariffs adversely affect our producers. We can mitigate those tariffs by subsidizing U.S. producers hurt by the tariffs, but doing so directs our resources to less economically efficient ends than they might otherwise obtain. Indeed, if carried far enough, such subsidies and the "tit for tat" could eventually do to our economy what Reagan forced the USSR to do to its economy. (That we might do so is exacerbated by the fact that we deficit spend.)

Why don't Americans just eat more soybeans?
  • That's just a cultural thing; Americans mostly aren't vegan/vegetarian. The question you've posed is substantively no different than asking why one doesn't buy blue cars instead of red ones (or vice versa), or why do people wear boxers instead of briefs (or vice versa).

Isn't American industry capable of finding some way of using soybeans to make beer cans so that America isn't reliant on foreign Aluminum?


Note:
Another exacerbating factor is that concurrently with engaging in a trade war with the PRC, Trump's engaged in one with our closest ally and trading partner as well.
 
Ikari said:
Yup, we'll see how it all works out in the end, but it seems like Trump is handing the Dems an easy win in 2020 so long as they are smart enough to capitalize on it.
Click to expand...

And that is the key thing here. Dems always find a way to snatch defeat from victory. In all honesty I don’t think we’ll ever see a true makeup of his nation with 25-35% voting rate instead of a 90%+ voting rate.
 
Waddy said:
You have no clue as to how agricultural products, and commodities in general, are traded.
Click to expand...

Strangely enough, customs documents require a declaration of "Country of Origin".
 
TU Curmudgeon said:
Strangely enough, customs documents require a declaration of "Country of Origin".
Click to expand...

You can always try to defraud the Chinese government. If caught however the end result can prove fatal
 
Xelor said:
The tariffs we slap on Chinese imports to dissuade or complain about a Chinese government behavior that has nothing to do with the actual products to which the tariffs are applicable. Our big complaint is China's disregard for intellectual property rights. Well, that's a matter of laws and business ethics not production and prices, yet we're "battling" by using trade restrictions. Why? Because there really is no obtainable legal recourse other than trade sanctions.
Click to expand...

Mr. Trump is suggesting that the solution to China's "disregard for intellectual property rights" is to withdraw from the WTO. That might work if withdrawing from the WTO wouldn't also mean withdrawing from the protection of American intellectual property rights that the WTO provides.

In short, Mr. Trump's "solution" is "In order to prevent ONE country abusing American intellectual property rights, we'll make it legal for EVERY country to abuse American intellectual property rights.". That "solution" appears to make perfect sense to Mr. Trump's supporters AND would be widely welcomed by those countries which are currently compelled to respect American intellectual property rights by their membership in the WTO.

PS - The (general) manner in which the PRC "abuses American intellectual property rights" is to take the position "IF you want to do business in China THEN you have to make your intellectual property rights available to Chinese companies. IF you do NOT want to make your intellectual property rights available to Chinese companies, THEN you cannot do business in the PRC.". The owners of those intellectual property rights then have complete freedom to decide if "doing business in China" is more important to them than "keeping their intellectual property out of the hands of Chinese companies".

  • If the answer is "Yes, it is." then those intellectual property right owners simply don't have to do business in China.

  • If the answer is "No, it isn't." THEN those intellectual property right owners can do business in China.

There is no "theft" involved (in the VAST majority of cases).

Where the Chinese companies spend R&D money to find ways of achieving the same ends as are reached through the protected intellectual property rights WITHOUT infringing on those intellectual property rights they are doing exactly the same thing as American companies are doing by spending R&D money to find ways of achieving the same ends as are reached through the protected intellectual property rights WITHOUT infringing on those intellectual property rights and, again, there is no "theft" involved.

Xelor said:
Note:
Another exacerbating factor is that concurrently with engaging in a trade war with the PRC, Trump's engaged in one with our closest ally and trading partner as well.
Click to expand...

Not a problem. After all "Trade Wars are easy to win.
 
TU Curmudgeon said:
Mr. Trump is suggesting that the solution to China's "disregard for intellectual property rights" is to withdraw from the WTO. That might work if withdrawing from the WTO wouldn't also mean withdrawing from the protection of American intellectual property rights that the WTO provides.

In short, Mr. Trump's "solution" is "In order to prevent ONE country abusing American intellectual property rights, we'll make it legal for EVERY country to abuse American intellectual property rights.". That "solution" appears to make perfect sense to Mr. Trump's supporters AND would be widely welcomed by those countries which are currently compelled to respect American intellectual property rights by their membership in the WTO.

PS - The (general) manner in which the PRC "abuses American intellectual property rights" is to take the position "IF you want to do business in China THEN you have to make your intellectual property rights available to Chinese companies. IF you do NOT want to make your intellectual property rights available to Chinese companies, THEN you cannot do business in the PRC.". The owners of those intellectual property rights then have complete freedom to decide if "doing business in China" is more important to them than "keeping their intellectual property out of the hands of Chinese companies".

  • If the answer is "Yes, it is." then those intellectual property right owners simply don't have to do business in China.
  • If the answer is "No, it isn't." THEN those intellectual property right owners can do business in China.

There is no "theft" involved (in the VAST majority of cases).

Where the Chinese companies spend R&D money to find ways of achieving the same ends as are reached through the protected intellectual property rights WITHOUT infringing on those intellectual property rights they are doing exactly the same thing as American companies are doing by spending R&D money to find ways of achieving the same ends as are reached through the protected intellectual property rights WITHOUT infringing on those intellectual property rights and, again, there is no "theft" involved.
Click to expand...
I agree.

The playing field has long been known and there have long been sourcing alternatives to China, and geopolitically, quite a few of them were even in the '70s when we commenced to source from China, better alternatives that were economically comparable to China.


TU Curmudgeon said:
Not a problem. After all "Trade Wars are easy to win."
Click to expand...
I'm thinking this is a sardonic remark....
 
Xelor said:
Isn't American industry capable of finding some way of using soybeans to make beer cans so that America isn't reliant on foreign Aluminum?


Note:
Another exacerbating factor is that concurrently with engaging in a trade war with the PRC, Trump's engaged in one with our closest ally and trading partner as well.
Click to expand...

My problem with soy are GMOs.
 
TU Curmudgeon said:
From United Press International

Midwestern farmers brace to lose billions in trade war
​

EVANSVILLE, Ind., July 3 (UPI) -- Farmers across the Midwestern United States expect to lose billions of dollars this year if the trade war between the United States and China continues to escalate.

China has threatened $50 billion in tariffs on American exports -- including soybeans and other agricultural products -- beginning Friday. The move is retaliation for tariffs the United States imposed on China to combat "unfair practices related to the acquisition of American intellectual property and technology," President Donald Trump said. Rather than spur China to alter its trade policies, China punched back, putting the two governments in a standoff.

Midwestern farmers are in the crossfire.

"There are issues related to our trade dealings with China," said Grant Kimberley, the director of market development for the Iowa Soybean Association. "Trump's not wrong. But the stakes are pretty high here. We don't want to be the pawn."

The stakes are high because China buys roughly 30 percent of all America's soy. The proposed 25 percent tariff -- which is a tax buyers pay the government to purchase the commodity -- ensures Chinese buyers will look elsewhere.

COMMENT:-

What's the problem?

Why don't Americans just eat more soybeans?

Isn't American industry capable of finding some way of using soybeans to make beer cans so that America isn't reliant on foreign Aluminum?
​
Click to expand...

Time for trump voters to bend over and take one for the team.
 
Quiet in this thread. I figured by now there would be a lot of self proclaimed farmers telling us these guys can just switch their crops and be fine.

They should plant tulips.

Sent from Trump Plaza's basement using Putin's MacBook.
 
So, we will see a bunch of small farmers go bankrupt. That will allow the big farmers to buy the land from the small farmers at a discount. .. then the trade was will end, and Trump will show how 'Great' a negotiator he is... (even if nothing changes)
 
Howard the Duck said:
Or our friends from Kentucky who hated obamacare but who would riot if Kynect were taken away.
Click to expand...
Or the West Virginians who 1/3 are on Medicaid but voted Trump by a 70% margin.
 
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