Trade Fight Over Farmers 🚜

by | 12 Jul, 2019

Trade Fight Over Farmers

The seismograph of trade war tension was just about to flatline when all of sudden; murmurs from the White House. Allegations are flying from West to East, with Trump accusing Xi of saying one thing and then doing another after their G-20 peace talks. Sounds like one for HR!

Some say trade shouldn’t be a zero-sum game, but alas, the US wants American businesses supplied by America suppliers. Those businesses have had their heads turned recently by what’s going on in China, as it ups its quality game. That’s why many of your US holdings have taken your portfolio overseas, supply chains truly going global. So, good for China, bad for the US. Trump’s having none of it. He wants a clean slate with China on trade, and that’s what his voters have elected him to get. 

After he taxed Chinese imports, the world’s second-biggest economy fought back. Now, many are calling this a race to the bottom with their money on both economies ending up in the toilet. To make matters worse, a resolution to it all hasn’t been forthcoming. New trade terms are being drafted at a snail’s pace, and now, a new roadblock has popped up.

While Mexico is back in Trump’s good books, China has apparently gone against its word by not ordering an agreed amount of crops from American farmers. He’s playing hard, and it’s the stock market’s agricultural players who stand to gain if he wins. Worst-case scenario is he just says “to hell with it!” and taxes all the goods China has left, bringing the global economy to a tipping point.

A lot is riding on this for agricultural investors, especially. Bankruptcies, a dwindling workforce, and losses on dairy foods are all problems for those stocks, not to mention the meat-less meat trend putting their cattle out of work. Perhaps the Chinese will make timely customers? The ball’s in their court.

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