IARN — President Donald Trump last week (Friday) threatened to impose new tariffs on China. His warning is in response to China’s mishandling of the coronavirus pandemic.
Greg McBride, commodities broker with Allendale, Inc., believes “it is only a matter of time” until we see the President act upon his threat.
“We thought we had good feelings moving forward with the Phase One trade deal. He’s adamant in wanting to retaliate against their slow play on the coronavirus and the misinformation that is out there about it,” McBride said. “I think it will happen.”
President Trump’s recent suggestion weighs heavily on commodity markets. Futures prices “backed down” on Friday, and saw further declines today (Monday). McBride fears tensions between the world’s two largest economies could worsen, if tariffs are imposed.
“If we put tariffs out there, they will come back at us,” McBride said. “The retaliatory tariff fight we have been dealing with for almost two years will probably happen again. Whether or not they back off their purchasing, I don’t know. They have a lot of corn, beans, and cotton they need to buy to refill those state reserves. Plus, they’re trying to rebuild their hog herd after African Swine Fever. There’s a lot of need on their part.”
As far as the Phase One agreement goes, McBride does not see either country “tearing up” the pact. He says, “We may be careful about what we impose tariffs on, but I don’t think they’ll tear up Phase One. There’s too much work that’s been done.”
Story courtesy of the Iowa Agribusiness Radio Network.