When President Donald Trump fired off a pair of tweets on Sunday, he set the stage for a market shakeup at home and abroad as politicos and producers alike tried to determine where global trade talks stood.
Trump announced plans to increase tariffs on billions of dollars worth of Chinese goods to 25 percent. Tariffs would rise from 10 percent on about $200 billion worth of goods and go from zero to 25 percent on another $325 billion worth of “untaxed” goods, Trump announced. He cited slow negotiations and a Chinese “attempt to renegotiate” as justification for his decision.
Monday morning, Trump doubled down on the matter, complaining about $500 billion in annual trade losses to China — a figure for which he did not provide a source.
“Sorry, we’re not going to be doing that anymore!” he said.
According to the U.S. Trade Representative, the U.S. ran a trade deficit with China of about $378.6 billion in 2018.
Davie Stephens, president of the American Soybean Association, said the news caught him off guard.
“I was shocked, because that’s something I didn’t see coming,” he said. The news of additional tariff threats adds to issues many domestic growers are facing with cool, wet weather delaying spring planting.
In a statement, industry coalition Tariffs Hurt the Heartland said raising the tariffs to 25 percent “could cost nearly one million American jobs” and would “increase the likelihood of retaliation of American farmers who are facing the lowest income levels in years.”
“Doubling down on taxing Americans as a negotiating tactic only makes a bad situation worse,” the group said. “This isn’t leverage to get a better deal, it’s taking money out of the pockets of hard-working Americans.”
American soybean production has been among one of the chief victims of the trade spat. Before Trump placed Section 232 tariffs on imported steel and aluminum and other countries responded with retaliatory duties, about one in three rows of U.S. soybeans ended up in China. Other commodities have also been hit by retaliatory tariffs from export partners around the world.
“We’re just hoping that they’ll give us back our market,” Stephens said of the ongoing trade negotiations with China.
A U.S. delegation was in China last week for a round of talks described by Treasury Secretary Steven Mnuchin as “productive.” Chinese negotiators are set to return to Washington this week to continue the dialogue, but news of the tariffs is said to have potentially changed the size and scope of the delegation.
Stephens said at this point, he’s looking for market certainty.
“I’ll be tickled to death when we have something put in place,” he said.
Story updated to add additional context.
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