Column: Trump 2.0 won’t reverse Biden’s critical minerals push
Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
The latest escalation in the trade war between the world’s biggest economies roiled commodities once again after China announced it will impose retaliatory tariffs on $75 billion of US. goods.
Soybeans will see an added duty starting Sept. 1, as China seeks to put more pressure on the American farm belt, a crucial voter base for President Donald Trump as he seeks reelection next year. U.S. oil imports into the Asian nation will also incur levies for the first time as the Xi Jinping administration runs out of ammunition in a dispute that’s been raging for more than a year and is threatening global commodity demand.
The Bloomberg Commodity Index, which measures returns from a slew of raw materials, fell 0.5% in New York trading. Soybeans in Chicago, crude oil in New York and London, cotton futures, LME copper and hog futures all slumped on concern over how the escalating spat will affect the health of the global economy. Gold rose as investors sought havens.
China’s announcement saying it would impose retaliatory tariffs on American goods in two batches — on Sept. 1 and Dec. 15 — is the latest salvo in the trade war between Beijing and Washington. Tensions escalated this month after the U.S. said it will boost tariffs on some Chinese goods starting Sept. 1, although Trump has delayed some of that increase due to the economic turbulence it might bring to U.S. consumers.
The U.S. threat prompted the Asian nation to halt purchases of agricultural goods and to let the yuan weaken. The Trump administration responded by labeling China a currency manipulator. Trade negotiators from both sides plan to meet for face-to-face talks in Washington in September.
An extra 5% tariff will be put on American soybeans from Sept. 1 on top of the existing 25% duty, according to China’s government. The Asian nation’s freeze in agricultural purchases means a higher levy on U.S. soy products will likely have little impact on trade flows.
“It’s more about making headlines than it is actually changing the amount of soybeans that flow between the U.S. and China,” said Arlan Suderman, chief commodities economist at INTL FCStone.
A 5% levy will also be imposed on crude oil starting next month. Last year, Beijing removed crude from a list of goods targeted for tariffs, signaling the importance of American oil in the global market. The decision to include it now shows how the trade spat has intensified, forcing it to use duties on the strategic commodity as ammunition.
“Energy is getting directly wrapped up in the latest round of China/U.S. retaliatory tariffs,” Noah Barrett, an analyst at Janus Henderson Investors, said in an email. “It’s clearly not a good headline for oil markets.”
While liquefied natural gas may have dodged the latest round of tariffs, plans for new American terminals to ship the fuel abroad are under threat as the tensions surrounding the trade war complicates negotiations with potential Chinese gas buyers.
Pork and beef products are also among the American goods to be hit with added tariffs as Beijing prioritizes the trade war over its need for cheap protein. While China doesn’t buy significant amounts of U.S. meat, the new levies provide additional barriers for producers hoping to help fill a supply gap in the Asian nation as a pig-killing disease decimates the country’s massive hog herd.
(By Pratish Narayanan)
Comments
Fox Mire
No doubt an erratic leader at best, he is correct in the assertion one is addressing trade issues that have existed for generations. More sleep and less Twitting could be of some help for the beleaguered leader.