Reuters has an interesting article, entitled “Inside China’s strategy in the soybean trade war”.
Mu Yan Kui … ticked off a six-part strategy to slash Chinese consumption and tap alternate supplies with little financial pain.
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Expansionary fiscal policy combined with Taylor-rule induced monetary tightening has resulted in a strong dollar. That strong dollar is driving US agricultural prices.
November soybean futures keep on going down. And the US-Brazil spread has proven durable.
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As part of the United States’ continuing response to China’s theft of American intellectual property and forced transfer of American technology, the Office of the United States Trade Representative (USTR) today released a list of approximately $200 billion worth of Chinese imports that will be subject to additional tariffs. In accordance with the direction of President Trump, the additional tariffs will be effective starting September 24, 2018, and initially will be in the amount of 10 percent. Starting January 1, 2019, the level of the additional tariffs will increase to 25 percent.
The list contains 5,745 full or partial lines of the original 6,031 tariff lines that were on a proposed list of Chinese imports announced on July 10, 2018. …
Implied US tariff overall tariff rates, from GS:
Source: Hatzius et al., “The Trade War: An Update,” Goldman Sachs June 25 2018.
Haven’t seen the Chinese back down so far, as some sanctions enthusiasts have predicted. If the demand is for China to give up on Made in China 2025, I’m guessing the Chinese are not going to back down in effect.
From Yahoo Finance:
Tariffs imposed as retaliation for US tariffs worsen the US terms of trade (i.e., lower ag export prices), and a strong dollar lowers US ag prices. Rising interest rates due to the collision of monetary and fiscal policies worsens the debt service load of the ag sector, while reducing farmland prices.
Thanks, Trump!
Today, we are pleased to present a guest contribution written by Laurent Ferrara (Banque de France), Ignacio Hernando (Banco de España) and Daniela Marconi (Banca d’Italia), summarizing the introductory chapter of their book International Macroeconomics in the wake of the Global Financial Crisis. The views expressed here are those solely of the author and do not reflect those of their respective institutions.
Figure 1: World GDP annual growth (in %, constant prices). Source: IMF, World Economic Outlook, April 2018 and July 2018 update
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Following up on yesterday’s tweets on estimates of excess mortality, official statement on twitter:
“When Trump visited the island territory last October, OFFICIALS told him in a briefing 16 PEOPLE had died from Maria.” The Washington Post. This was long AFTER the hurricane took place. Over many months it went to 64 PEOPLE. Then, like magic, “3000 PEOPLE KILLED.” They hired……..GWU Research to tell them how many people had died in Puerto Rico (how would they not know this?). This method was never done with previous hurricanes because other jurisdictions know how many people were killed. FIFTY TIMES LAST ORIGINAL NUMBER – NO WAY!
Lehman Brothers, the global financial crisis and ensuing great recession, plus ten.
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