Tag Archives: Economy

Tariffs and U.S. Agriculture

06 Tuesday May 2025

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In 2018, the U.S. imposed tariffs on over $250 billion worth of Chinese products, leading to Chinese retaliation with tariffs on over $110 billion worth of U.S. products, including agricultural products like soybeans, pork, and ethanol.

By December 2019, the average U.S. tariff rates on Chinese products had increased to 24.3%, while Chinese tariffs on U.S. exports were set to reach 25.9%.

These retaliatory tariffs significantly impacted U.S. agricultural exports, leading to a decline of $27 billion between mid-2018 and the end of 2019. Soybeans were most affected, accounting for 71% of the decline.

China purchased only 58% of the US exports it had committed to purchase under the agreement, not even enough to reach its import levels from before the trade war.

The trade war led to a significant drop in U.S. soybean exports to China, declining by 75% in 2018.

To mitigate the impact on farmers, the Trump administration provided $28 billion in aid, a sum exceeding the annual budget of various government agencies, including the Navy’s shipbuilding program and the cost of maintaining the U.S. nuclear arsenal.

Despite the trade war, a survey of Midwestern farmers conducted in early 2019 revealed that over 56% remained supportive of President Trump’s tariffs. This sentiment persisted even though over 80% reported experiencing income losses due to the trade disruptions.


A key takeaway from this that the trade war primarily hurt U.S. farmers and consumers, and the tariffs did not achieve the intended outcome of benefiting U.S. industries. The “Phase One” agreement signed in January 2020, while halting further tariff escalation, did not fully resolve the issues, and China fell short of its purchase commitments.
Experts argue that a more effective approach would involve lowering or eliminating tariffs and focusing on constructive trade policies that promote economic growth and competition.

Economy again

16 Sunday Mar 2025

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With everyone trying to diversity their supply chain with domestic and ‘friendly’ suppliers the result will be …. a varied multi market, country, slow steady growth rate.
Or .. at the very least it’s s a theory.

of course there is the little problem of the reserve currency. I thought back in 2007 that the euro💶 would evolve into the big R. (I’ll look for the blog post)
They certainly have the potential. EU is considered more stable then China….and now apparently USA

U.S.-China Trade War and Its Impact on U.S. Agriculture

10 Friday Jan 2025

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The sources discuss the U.S.-China trade war initiated by the Trump administration and its significant impact on the U.S. agricultural sector. 

  In 2018, the U.S. imposed tariffs on over $250 billion worth of Chinese products, leading to Chinese retaliation with tariffs on over $110 billion worth of U.S. products, including agricultural products like soybeans, pork, and ethanol.
  By December 2019, the average U.S. tariff rates on Chinese products had increased to 24.3%, while Chinese tariffs on U.S. exports were set to reach 25.9%.
  These retaliatory tariffs significantly impacted U.S. agricultural exports, leading to a decline of $27 billion between mid-2018 and the end of 2019. Soybeans were most affected, accounting for 71% of the decline.
  China purchased only 58% of the US exports it had committed to purchase under the agreement, not even enough to reach its import levels from before the trade war**.
  The trade war led to a significant drop in U.S. soybean exports to China, declining by 75% in 2018.
  To mitigate the impact on farmers, the Trump administration provided $28 billion in aid, a sum exceeding the annual budget of various government agencies, including the Navy’s shipbuilding program and the cost of maintaining the U.S. nuclear arsenal.

Despite the trade war, a survey of Midwestern farmers conducted in early 2019 revealed that over 56% remained supportive of President Trump’s tariffs. This sentiment persisted even though over 80% reported experiencing income losses due to the trade disruptions.

A key takeaway from the sources is that the trade war primarily hurt U.S. farmers and consumers, and the tariffs did not achieve the intended outcome of benefiting U.S. industries. The “Phase One” agreement signed in January 2020, while halting further tariff escalation, did not fully resolve the issues, and China fell short of its purchase commitments.

Experts argue that a more effective approach would involve lowering or eliminating tariffs and focusing on constructive trade policies that promote economic growth and competition.

Source articles below:

PIIE
PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS

Forbes

Farm Action US

Tax Foundation

Iowa State University

Brookings Institute: Watch Advancing inclusive development in rural towns

11 Friday Oct 2024

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“Brookings Metro and the Local Initiatives Support Corporation (LISC) will bring together national, state, and local leaders from rural America to discuss community-centered and bottom-up approaches to inclusive economic development. The event will spotlight the experiences and lessons learned from an in-depth Brookings and LISC-led “Learning Lab” deployed in three rural Indiana towns, which was devoted to advancing economic inclusion by linking disinvested rural districts to broader regional growth strategies. It will also offer concrete policy recommendations for how state,local, and federal governments can better advance inclusive access to opportunity, quality of place, and quality of life in rural America.”

DG

28 Wednesday Feb 2024

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As of January 8, 2024, Dollar General (DG) has 19,643 stores in the continental United States and Mexico. (Wikipedia)
In 2022, the company’s revenue was $34.8 billion and its net income/profit was $3.1 billion. (Wikipedia)

I was reminded of this the other day as I was waiting in line at DG and saw a manager fiddle with the safe (didn’t have my glasses on and couldn’t really see what she was doing).

Much like other large retailers (Walmart and Albertsons), DG has the ability to negotiate lower prices for some goods because of their enormous size. At my local DG, most prices are on par with the local grocery store. Of course I can’t really say local … not in my definition of what local is. DG is a 23 mile round trip, the grocery store (Safeway), is an 80 mile round trip. Such is the way of rural life.

Dollar General’s strategy is to target low-income and low-population areas that other major retailers avoid. 75% of their stores are in towns with fewer than 20,000 people. (LinkedIn) DG can and does serve as a food and other goods lifeline to the areas it serves. Well, at least my ‘local’ DG.

However, DG never has any fresh produce. I understand why, produce in a store is labor intensive compared to everything else. Plus produce goes bad if no one buys it, a potential money losing proposition.

DG does seem to have a poor reputation (lots of employee and consumer complaints) including more than $21 million in fines from the federal Occupational Safety and Health Administration for having blocked fire exits, dangerous levels of clutter and more. Even shareholders are upset as they voted for a resolution that called for an independent, third-party audit into worker safety, a move that the company opposed. (CNBC)

DG does have its role in providing goods to folks who would otherwise not have any other resources. For that I am grateful. But, they need to clean up their act.

Reserve Currency part 2

22 Tuesday Mar 2022

Posted by in China, Economics, Economy, news, Politics, Uncategorized

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Before the yuan can become a global currency, it must first be successful as a reserve currency. That would give China the following benefits:

The yuan would be used to price more international contracts. China exports a lot of commodities that are traditionally priced in U.S. dollars. If they were priced in yuan, China would not have to worry so much about the dollar’s value.
All central banks would have to hold yuan as part of their foreign exchange reserves. The yuan would be in higher demand. That would lower interest rates for bonds denominated in yuan.
Chinese exporters would have lower borrowing costs.
China would have more economic clout in relation to the United States.
It would support President Jinping’s economic reforms.

China is working hard to make the yuan the next global currency. Although presently a reserve currency, the yuan can’t upstage the U.S. dollar unless the following scenarios happen:

Central banks around the world choose to keep a total of at least $700 billion worth of yuan in foreign exchange reserves.
The People’s Bank of China (PBOC) allows free trade of the yuan and relaxes its peg to the U.S. dollar.
The PBOC becomes straightforward about its future intentions with the yuan.
China’s financial markets turn transparent.
Chinese monetary policies are perceived as stable.
The yuan acquires the U.S. dollar’s reputation of stability, which is backed by the enormity and liquidity of U.S. Treasurys.

The China Economic Risk Matrix: Pinpointing the Dangers in China’s Financial System

25 Friday Sep 2020

Posted by in Economics, Economy, news

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CSIS: The China Economic Risk Matrix, written by the Trustee Chair in Chinese Business and Economics’ non-resident senior associate Daniel Rosen, non-resident adjunct fellow Logan Wright, and Associate Director of the China Projects team at Rhodium Group, Lauren Gloudeman. Despite rising inefficiency, China’s financial system has served as the shock absorber that has helped China’s economy recover from the virus outbreak and maintain growth. But the same elements that have driven China’s recovery have also pushed China’s financial system deep into a gauntlet of systemic financial risks. The China Economic Risk Matrix is the combination of indicators of financial vulnerability that threaten to overwhelm Beijing’s policy tools to manage them, along with a novel, China-specific financial stress indicator. Building on the earlier CSIS volume, Credit and Credibility, this report explores the specific conditions and markets in which changes in government credibility can have a significant impact on systemic stability in China.

America’s Jobs Recovery |Public Debt

13 Sunday Sep 2020

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The U.S. unemployment rate shot up faster than in any other developed country during the pandemic. WSJ explains how differences in government aid and labor-market structures can help predict how and where jobs might recover.

The covid-19 pandemic is set to increase public debt to levels last seen after the second world war. But is rising public debt a cause for concern? New economic thinking suggests perhaps not, at least for now.

U.S. Economy Grew by 2.3%

26 Saturday Jan 2019

Posted by in Economy, global, news

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The economy grew at an annual rate of 2.3 percent in the first quarter, the government reported Friday, offering a preliminary glance at how last year’s sweeping package of tax cuts is affecting consumers and businesses this year.

During the first three months of 2018, the economy was whacked around like a pinball. The stock market took investors on a giddy ride. President Trump imposed tariffs on allies and rivals alike, stoking fears of a trade war. And the revamped tax code shifted business incentives and started to put more money in workers’ paychecks.111gdp1q18_adv_chart

Still, the economy ended up puttering along just a bit above the average yearly growth rate that it had registered since the recession ended nearly nine years ago.

Read More:
https://www.nytimes.com/2018/04/27/business/economy/gdp-economy.html

https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm