We thought there was a light at the end of the tunnel concerning Chinese trade last week, and there still may be one. However, right now the tunnel is looking like the ones Roadrunner and Wile. E. Coyote were painting on the sides of cliffs in a Saturday morning cartoon.
U.S. Treasury Secretary Steven Mnuchin made the interview circuit, not ten days ago, touting the breakthrough made in trade negotiations with China.
The tariffs, rhetoric and uncertainty were being put on hold. In fact, trade negotiations are set to continue this week when U.S. Commerce Secretary Wilbur Ross arrives in Beijing on Saturday.
But wait just a minute, hold the phone and stop the presses!
The White House announced Tuesday that the Trump Administration is going to go forward with $50 billion in tariffs on June 15th. The Chinese are not taking this news lightly. The Chinese Government released a statement saying the Trump Administration’s moves were, “contrary to a consensus reached in Washington.” Questions are being raised if trade talks will dissolve before they even start, or if this is just more rhetoric to underscore the need to move talks along.
This news has made farmers and grain traders nervous and rightfully so. When the first tariff threats were being slung back and forth across the Pacific, U.S. agriculture products were put right into China’s crosshairs. With commodity prices already low, tariffs and a trade war are the last thing that farmers need to shoulder.
President Trump claims he will do what he can to support American Farmers in the event of a trade war. Maybe trying to avoid one in the first place, would be a step in the right direction.