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A surge of soy makes Trump's trade war seem deceptively good

WASHINGTON – President Trump's trade war is expected to temporarily reinforce US economic growth, in part because Beijing tried to beat Mr. Trump's tariffs by stocking up on US soybeans, crude oil and other exports. .

Economists predict that the gross domestic product for the second quarter could reach 5 percent when the preliminary figures are released on July 27. The US trade gap with China has narrowed as more US goods were shipped to Beijing before tariffs. It came into effect on July 6.

But both effects are expected to be fleeting, and the short-term economic improvement could become a long-term loss if both countries comply with their threats to continue escalating tariffs among them. [19659002] "They will dance, they will sing, they will say, they watch the fall of the trade deficit in the second quarter," said Ian Shepherdson, chief economist at Pantheon Macroec. onomics. "That is, of course, complete."

The United States is involved in multiple trade wars at the same time as it imposes tariffs on the metals of the European Union, Mexico, Canada and other nations. But it is fighting an even bigger battle with China, a dispute that threatens to encompass broad swaths of the two largest economies in the world. The Trump administration has accused the Chinese of of a variety of commercial abuses, including the theft of intellectual property and of denying US companies the same access to the Chinese market. Mr. Trump has already imposed 25 percent tariffs on Chinese products worth $ 34 billion and has threatened to pay up to $ 450 billion in Chinese products with liens.

On Tuesday, the administration published a list of an additional $ 200 billion in products that could face tariffs as early as September. China had already responded with its own tariffs, soybeans, pork, automobiles and other products and said that its next wave of tariffs could include US oil exports.

Growth in the United States has remained strong throughout Mr. Trump's tariff threats. But they have shaken global markets and altered buying patterns between countries, in a way that has temporarily helped growth in the United States.

The value of US soybean exports doubled in May over the previous year, according to data from the Census Bureau, as a result of an increase in sales to the Chinese and a fall in the price of soybeans . Data on soybean inspections exported by the Department of Agriculture suggest that the increase continued until June, peaking in the week before Trump imposed its tariffs.

The soybean increase is only projected by Shepherdson to add 0.6 percent to the US annualized economic growth rate for the second quarter.

Soybean growers and economists say it is difficult to see anything other than the anticipation of tariffs driving the increase in soy purchases.

"They expected tariffs to be set by the United States, and then they would retaliate," said Ron Moore, an Illinois farmer who is the president of the American Soybean Association. "My guess is that they were trying to store as many beans as they could before those tariffs went to US imports."

Mr. Trump tried to address the concerns of soy producers in a couple of tweets Wednesday from Brussels, where he participates in a NATO summit. Apparently, he referred to a 40 percent drop in soybean prices of $ 615 per metric ton in 2012, a short increase, to $ 368 in November 2016.

US steel exports have also increased this year, by 4 percent from a year ago, according to statistics from the Census Bureau. 19659002] Economic growth has accelerated since Trump took office, and he is pleased to predict that he will grow more in the coming years. Some of its economic advisers have clung to projections of high growth in the second quarter as a sign that administrative policies, such as tax cuts, deregulation and commercial strategy, are overfeeding growth.

"Look at G.D.P. numbers," the president in Wisconsin said late last month. "I think we're going to be watching 4s and I think we'll also see 5."

Many forecasters predict that the US economy could approach or even achieve 3 percent growth this year, but they will not see it reach 4 or 5 percent. In fact, they see a slowdown in growth in the coming years, as the stimulus of Trump's tax cuts and higher government spending fade.

Chris Rogers, director of research at Panjiva, said that "the excess tariffs applied by China against US exports will inevitably act as a drag on growth in the future, as Chinese buyers find lower cost suppliers , particularly for commodities.

"Since July 6, why would you pay more for crude, when could you from Saudi Arabia or Iran? "Mr. Rogers said" Why would you pay more for soy, when you could get it from Brazil? "

Carl Weinberg, chief international economist at High Frequency Economics, wrote in a research note this week that oil and Oil products are the largest category of US exports have been affected by Chinese tariffs so far, and China will have no problems to replace them: "There is a lot of supply at a price much lower than 25 percent on prices from the USA UU., "He wrote." US producers will have to struggle to find new customers. "

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