All posts filed under “Trade

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Oh boy, what about the soy?

On April 4th, the Chinese government announced tariffs on 106 products from the US, as a response to tariffs the US government issued on Chinese products the day before. Soybeans are a part of these tariffs, with a levy of 25% slapped on it. The US soybean trade to China is supposedly valued at $12 billion, and thus very important for farmers in the US midlands. As shown in the graph, made by the Washington Post, the soybean prices took an immediate hit and plummeted by more than five percent. One of the interesting effects of this could be that farmers, who usually plant their soy around this point in time, turn away from soy and plant corn instead.

 

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Trump tariffs, a drop in the ocean?

One of the biggest stories in the last month has been the reintroduction of protectionist policies by the United States. Protectionist rhetoric was part of the campaign President Donald Trump ran on, and he’s put some truth to those words in the last month: he introduced steel and aluminium tariffs, while also applying tariffs on Chinese products. This week, China responded by imposing tariffs of their own on US products, culminating in what pundits claim to be a ‘trade war’. This graph, made by Goldman Sachs, shows the effective tariff rate since 1929, against this backdrop, it looks as if Trump tariffs are small, despite all the media attention. The recent tariffs equate to an increase of less than 1%. (source)

Update 4/4: This graph does not reflect the new tariffs that have been enforced on April 3rd, of which Douglas Irwin, author of “Clashing Over Commerce: A History of U.S. Trade Policy,” says that President Trump’s action is one of the largest trade moves in more than three decades.

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The EU’s Top Trading Partners

According to Eurostat, the United States and China (with €631 bn and €573 bn worth of goods, respectively) are still the two main goods trading partners of the European Union. Together they represent one third of total extra-EU trade. Switzerland (€261 bn, or 7.0%), Russia (€231 bn, or 6.2%), Turkey (€154 bn, or 4.1%) and Japan (€129 bn, or 3.5%) are way behind. In 2017, machinery and transport equipment, other manufactured goods and chemicals represented the main categories of product traded by the EU. For instance, France exported perfume worth over €4 bn, of which more than €1 bn’s worth went to the US. (source)

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Foreign Fruits and Vegetables

Source: U.S.D.A. Economic Research Service

The New York Times has published a thoughtful pieces on the pros and cons of eating imported fruit and vegetables, pivoting around one stunning statistic:  imports have been rising steadily for decades, and now more than half of the fresh fruit an  a third of the fresh vegetables consumed in the US come from other countries. Among the reasons are: improved trade infrastructure, deregulation, more demand for fresh produce year-round, the influence of immigrants’ tastes on the US consumption patters (e.g. avocados and mangoes). Almost half of the imported fruit comes from Mexico, some 15% from Chile. (source)