President Trump announced a new round of tariffs against China on Thursday, implementing a new 10% tax on $300 billion of Chinese goods. He cited China’s complicity in the ongoing U.S. opioid epidemic as well as a lack of new Chinese purchases of U.S. agricultural goods as they previously had promised to do as rationale for the new round of tariffs.
The goods being taxed in this round of tariffs are largely consumer goods, covering items that Americans predominantly buy from China like shoes, clothing, cell phones, and toys. The new tax will likely mean higher prices for Americans for these items.
As a result, economic markets took another nosedive Thursday and Friday, with stocks and crude oil falling to six-week lows on expectations for a slowing U.S. economy if Americans must cut back to pay higher prices for Chinese goods.
Meanwhile, agricultural markets saw the bottom fall out, with cattle and hogs falling hard, while corn, wheat, and soybean prices all collapsed to ten-week lows. Farmers had hoped for China to finally start buying more U.S. grain and meat once the trade war was settled, but a resolution feels farther away now more than ever.
As of midday Friday December corn was worth $4.06 per bushel, November soybeans traded for $8.68, and December Kansas City wheat fetched $4.36. December cattle and hogs were worth $1.12 and $0.65 per pound, respectively.