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Sunday, August 4, 2019

Trump is in trouble because China is no longer interested to buy US agricultural products.

China has increased agricultural and farming products from Russia and Argentina recently and the purchases are spearheaded by Zhong Shan, the commence minister.

https://www.scmp.com/economy/china-economy/article/3019187/china-and-russia-vow-deepen-trade-soybeans-after-tariff-war

https://www.reuters.com/article/us-argentina-soyproducts-china-exclusive/exclusive-china-to-inspect-argentine-crushers-could-unlock-no-1-soymeal-market-idUSKCN1UP1WT

Zhong Shan is a hawkish Chinese and is ordered by President Xi to take over the US-China trade talk from Liu He who is dovish.  The US team must be regretting now for not concluding the trade talk with Liu He.  The US team is facing Zhong Shan now and the trade talk will be very difficult to reach a settlement because he will walk away from any unfair and unreasonable US demand.  Zhong Shan will take on the additional US tariffs and impose China tariffs too.

Trump is foolish to think that China will back down now.  I believe Trump will back down instead because his tariffs will affect the upcoming festivals such as Thanksgiving and Christmas.  He will lose a lot of votes when his supporters cannot enjoy their festivals since consumer good prices will rise tremendously after the tariffs.

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