Category Archives: Trade Policy
Winning: Midwest Manufacturing Employment
Michigan, Pennsylvania and Wisconsin drop, as US manufacturing employment rises.
A History of Trade Policy Retaliation: Soybeans Edition
As the date of the resolution of the US-China trade dispute drifts further and further — perhaps past the 2020 elections according to Mr. Trump — it behooves us to look at what soybean futures contracts for September 2019 indicated as of Trump’s announcement of Section 301 action against China ($10.30 bushel on 3/22/2018) vs $8.67 today (Sept. 2019 is the front month future for soybeans now).
Do Tariffs Matter? Soybean Edition
A year ago, there was some debate (e.g., S. Kopits) whether tariffs on US soybeans would have any impact on US soybean exports — that is since soybeans were highly substitutable, US soybean exports would be redistributed w/o an impact on prices.
From Deutsche Bank today:
Undervaluation, Misalignment, and China in the 2019 IMF External Sector Report
Donald Trump’s pronouncements can typically be taken as contra-indicators. In other words, what he says is invariably wrong. So, you gotta wonder on China…
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SitRep from the Midwest
No end to “the blip“. From today’s Des Moines Register:
The Never-Ending Blip
On July 9, 2018, almost exactly a year ago, reader CoRev wrote:
Those of us arguing against the constant anti-tariff, anti-Trump dialogs have noted this will probably be a price blip lasting until US/Chinese negotiations end. We are on record saying the prices will be back approaching last year’s harvest season prices.
Prospects for a Resolution to the US-Trade Dispute Inferred from Soybean Futures
Asset price movements around “news” regarding policy can illuminate the market’s assessment of the outlook for trade policy. Looking at a small window (say half hour) around an event can allow one to separate other factors (weather, other demand factors) from other. With that, let’s look at soybean futures (September 2019)…
The Answer Is No (and No)
Figure 1: CNY/USD nominal exchange rate (red, left inverted scale), 8/5 value (red triangle, left inverted scale), trade weighted real value of CNY against broad basket of currencies (blue, right log scale). Up denotes appreciation. Light orange shading denotes Trump administration. Source: FRED, and BIS.
In a new (and extremely timely) EconoFact memo on Should the United States Try to Weaken the Dollar?, Michael Klein and Maury Obstfeld ask:
The 16 Month-long Blip in Soybean Prices
On July 9, 2018, reader CoRev disparaged futures prices as accurate predictors of future spot prices for soybeans, writing:
no one has denied the impact of tariffs on FUTURES prices. Those of us arguing against the constant anti-tariff, anti-Trump dialogs have noted this will probably be a price blip lasting until US/Chinese negotiations end. We are on record saying the prices will be back approaching last year’s harvest season prices.