China threatens tariffs on soybeans, cotton, corn and other agricultural products from rural areas that voted for Trump - Entrepreneur Generations

The day after President Trump announced tariffs on more than 1,300 Chinese products, China escalated the brewing trade war with the United States today, saying it would levy 25 percent tariffs on $50 billion worth of U.S. products that will likely hurt the rural areas that voted for Trump.

"China’s Ministry of Commerce on Wednesday said it plans to impose 25 percent duties on the commodity in addition to other U.S. agricultural produce including wheat, corn, cotton, sorghum, tobacco and beef," Alfred Cang and Phoebe Sedgman report for Bloomberg. "They’re among 106 products ranging from aircraft to chemicals targeted by Beijing in retaliation for proposed American duties on its high-tech goods." Other targeted products include tobacco, whiskey, and orange juice, Don Lee and Jonathan Kaiman report for the Los Angeles Times.

China is America's biggest customer for soybeans and cotton, importing about $14 billion in soybeans alone last year. The announcement triggered a drop in soybean, corn and cotton futures, with soybeans falling as much as 5.3 percent to $9.835 a bushel.

Sorghum has not yet been targeted for tariffs, but it's another vulnerable market since China buys about 80 percent of U.S. sorghum exports, worth about $957 million in 2017. China began pointedly investigating sorghum imports after Trump imposed tariffs on steel and aluminum.

This round of tariffs specifically targets Trump's rural base: "Trump won eight of the U.S.' top-10 soy-exporting states in his 2016 election, according to the U.S. Department of Agriculture. Wisconsin and Michigan, both crucial swing states in the election, are also major soybean exporters. Analysts say China could make up some of the shortfall by importing from Brazil," Lee and Kaiman report. "Whiskey, to take another example, is a prime product of Kentucky, the home of Senate Majority Leader Mitch McConnell, who has already expressed reservations about Trump's tariff policies. Orange juice is heavily produced in Florida, a key swing state."

It's possible both the U.S. and China could back down from the latest round of tariff threats: the tariffs Trump announced yesterday won't take effect until after a public comment period ends on May 11. And China has not said when the tariffs it announced today will take effect.

from The Rural Blog https://ift.tt/2uTn64j China threatens tariffs on soybeans, cotton, corn and other agricultural products from rural areas that voted for Trump - Entrepreneur Generations

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