China Trade War
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Started by wglassfo - July 11, 2018, 12:16 p.m.

 the trade war has entered into actual tariffs with more promised 

However, a window of opportunity has been left open for negotiation to happen, although it seems no negotiations are happening as of now

What effect do you think will happen to both china and the USA

USA sells less to china than china sells to USA, but china is currently exploring different ways to retaliate against USA possible complete tarrifs on all Chinese exports into USA

There are many different twists and turns ahead

What do you think will happen

By Jim_M - July 11, 2018, 12:55 p.m.
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China will capitulate.  They are in a no win situation.  They need the US export business.  But the US isn't going to move forward without a move even trade agreement.   Steel industries are already hiring and reopening shuttered plants.  

By wglassfo - July 11, 2018, 5:03 p.m.
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I think china is well aware of the export surplus, at least as long as Trump was on the campaign trail for president

I am sure they studied Clinton just as closely, but maybe for different things

China seems to always be prepared

If I was China I would look for USA weakness

Trump is obviously looking for Chinese weakness

China is already causing import duties, inspections etc. at ports to move in slow motion

China is taking stock of the USA companies that operate in china

I think that USA/chinese business, inside china, is close to 1/2 of Chinese exports to USA, and you can bet that some day soon, the USA citizen that is being asked to pay a little bit more or sell for a little bit less will run out of patience

When the pocket book is hurt, people tend to complain and eventually make demands to turn this ship around

So far the citizens have been very patient

They know what Trump is doing and saying is correct, thus the citizens will stick with Trump

However, if the stk market suffers large losses, will the folks continue to be patient

What happens if pension money dries up if the market fails to pay dividends

Ivanka does business with china  labour and sells goods into the USA as one example of many, iPhone sales in china could be halted, the list is very long of who would be hurt if china stops outside investment in china

They could devalue their yaun but that might cause china as much pain as the USA as outside capital could buy more assets inside china for the same cost, unless china stops outside investment, which might happen

China could sell their treasury bills

China is working very hard on the silk road, which would open up different markets, plus has been working to open up agriculture production in Africa

Of course the one thing we don't want is a hot war in the south china seas, but as a diversion this would be a major event with no idea the out comeChina has many tools to use other than just amount of goods shipped to the USA

China has known this for some time and has been making preperations

What kind of plan B does Trump have if he goes all the way and puts tariffs on all Chinese import goods and services, but china is willing to stay the course

China didn't just fall off the turnip wagon

Methinks if things go all the way a recession will happen and high odds of a depression

My son buys steel from those USA steel mills and he says either rampant inflation or depression as steel prices ramp up

Other goods will also ramp up thus the need for higher wages

Inflation would be my bet vs depression, as the Fed prints money

Of course somebody could decide the time is ripe for socialism

I am sure many will disagree with me

I would be very interested in your thoughts as this trade war is real and today, and markets are taking things seriously

Many mutual funds have had heavy redemptions

No more head in the sand

By wglassfo - July 11, 2018, 5:10 p.m.
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I should have clarified

Recession or depression if the Fed maintains the

status quo 

Inflation if the Fed prints money

By Lacey - July 12, 2018, 8:40 a.m.
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About time.  We have nothing to lose.  155 million jobs lost. Let's bring 100 million of those jobs back to America.  Still if that were to happen, 55 million jobs lost to China.  Finally someone in our corner.

By Lacey - July 13, 2018, 2:12 p.m.
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Maybe we should tell China we will not sell them any more food.  I bet that gets their attention.  Dig in your heals and stay the course Trump.

By MarkB - July 14, 2018, 2:55 a.m.
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By raising the tariffs on China, it might make American producers more attractive. And also protect against the violations of intelectual property rights. 

By wglassfo - July 14, 2018, 8:11 a.m.
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"maybe we should not sell them any more food"

China has already stopped all purchases of soybeans

What do we do with the surplus grain if we stop selling to china

Our price of grain has fallen and the farmer takes the biggest hit

By MarkB - July 15, 2018, 1:55 a.m.
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So what? Who are they gonna buy their food from? We already know that they can't produce enough to feed themselves. So if not from us, then it has to be SA.

By metmike - July 15, 2018, 11:30 a.m.
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Watching prices fall the fastest and farthest since I've been trading has got to make producers sick. 

It's been a double whammy with very high crop ratings and forecast for massive, record yields on top of the very negative price war with China.  As you know, price moves often go to an extreme when the huge funds feed them and use momentum and other indicators to push things in the same direction.........well beyond what value based on fundamentals dictates.

Corn is probably undervalued here as it should not be effected that from the China trade war. THe USDA report on Thursday was incredibly bearish for beans, with US ending stocks increasing by 200 million bushels but prices below 10 year lows probably dialed that in.

August weather for bean pod fill(and corn kernel fill) is still important. 

By metmike - July 16, 2018, 1:43 p.m.
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From MarketWatch:

CEO of world’s largest asset manager says tariff clash could knock 10% to 15% off the stock market

“Strong earnings and the U.S. economic growth unfortunately are being offset by heightened uncertainty due to rising protectionism and potential barriers to the open markets and free trade that have been for years supported global economic growth and the expansion of international markets. These circumstances are impacting markets, exchange rates and global capital flows,” he said."

By Lacey - July 16, 2018, 8:15 p.m.
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There is going to be some short term pain. But how else do you begin to turn the trade picture around.  Trade negotiations?  First president in 4 administrations.  Its for your grandchildren. 

By metmike - July 17, 2018, 2 p.m.
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Adding lots of fuel to the selling has been excellent weather and crop ratings. 

Crop ratings dropped a bit more than the market expected -2% beans, -3% corn, so we had a bounce today.

Maybe we put the lows in earlier than usual this year. Crop ratings have peaked for sure but they usually deteriorate during July/August as soils dry out seasonallly and the crop does not look as green. 

The rains coming up later this week will help determine where we go.

If they are  less than expected like this last round, we can go higher.............or if the current cool outlook shifts to hot, we WILL go higher.

More rains and cool temps will have the opposite effect.

By Jim_M - July 17, 2018, 2:36 p.m.
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We had an 80% chance of rain in my neck of NE Ohio.  I sat under a tree for about 10 minutes during a brief shower.  I didn't even really get wet.  And that was it.  

It's been hot and dry.  Day after day after day.  The corn was looking great, but now....not as great.  I had mentioned a field I pass on the way to and from work about a week ago?  Tassles, green full.  Yesterday I looked a little harder, leaves rolled and considerably "drier" looking.