As of Friday morning, the United States has levied 25% tariffs on nearly one-third of all Chinese products in response to President Xi Jinping of China reportedly reneging on parts of a drafted agreement presented to him post-negotiation by U.S. and Chinese officials. Tariffs and trade disputes have been front-page news for over a year now, and I get questions about them all the time. The details of how tariffs work aren’t hard to understand, but sometimes the economic consequences are. With tariffs back in the news I thought I’d take a moment to explain (written and graphically as we had to do in my graduate trade class) how these tariffs actually work. [Read more…] about ‘It Depends’ – How do all these tariffs actually work?
High Plains Ag Week – 5/10/2019
Lots of red in the contracts of interest section this week. Markets plunged quite a bit this week, largely in response to poor planting progress and the announcement of new reenacted/new tariffs on Chinese goods, which we’ll talk about in ‘It Depends’. Dec. Corn is down approximately 1.22% from the week opening and down 7.92% from its four-month high of $4.04/bu. on February 25. Seasonal trends have corn rising around 70% of years during this period, and slowed planting would normally support that, however high carryover and continued trade tensions seem to be dampening those fundamental signals.