The decline in soybean prices could be linked to the threat, an ag economics professor said
By Diego Flammini
Soybean futures fell during trading Monday and the steep decline could be linked to tweets from President Trump, an ag economist said.
May soybean prices are around US$8.16 per bushel, down from the previous mark of US$8.29 per bushel. And July futures fell from US$8.42 per bushel to US$8.29 per bushel, the Chicago Board of Trade said.
The president sent messages out on social media Sunday outlining his intentions to raise tariffs on Chinese goods already facing import taxes.
The products at “10 percent (tariffs) will go up to 25 percent on Friday,” he said on Twitter.
Chinese items facing the 10 percent levy include several food products, fabrics and stainless steel.
Another US$325 billion of Chinese products could also be subject to a 25 percent tariff, the president added.
Evidence suggests soybean markets fell after President Trump sent out those posts, said Dan O’Brien, an associate professor of ag economics at Kansas State University.
“The market (dropped) in response to these messages,” he told Farms.com. “Prices are down between 12 and 15 cents (per bushel) wherever you look. I haven’t seen anything that would indicate anything other than (the president’s tweets).”
The Dow Jones, Toronto Stock Exchange and West Texas Intermediate also experienced losses when trading opened Monday.
President Trump’s tweets come prior to Chinese Vice Premier Liu He’s trip to the U.S. for another round of trade discussions.
The Chinese delegation may back out of those planned meetings, CNBC reported.
Something must be in the trade documents that is forcing the president and his administration to react with tariffs, O’Brien said.
“We’re getting close to the final deadline where the two parties have to sign on the dotted line about what they’re willing to compromise on, and then this statement comes out over the weekend,” he said. “What we don’t know is what precipitated the need to make a statement like this.”
At least one organization has responded to the president’s social media messages.
Increasing the tariffs will affect Americans negatively, said Tariffs Hurt the Heartland, which documents the effects of tariffs on American families.
“For 10 months, Americans have been paying the full cost of the trade war, not China,” the organization said in a statement on Sunday. “If the president follows through on his threat, the consequences will be dire. Raising tariffs to 25 percent could cost nearly one million American jobs, according to recent estimates.
“This decision will also roil financial markets and increase the likelihood of retaliation on American farmers who are facing the lowest income level in years.”