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Thursday, May 09, 2019

Tariff hikes looms over U.S-China trade talks; president of soybean farmers says they 'are in a desperate situation'

"U.S. and Chinese negotiators will meet today in Washington, with less than 24 hours until the Trump administration dials up the trade tension on Friday by increasing tariffs on $200 billion in Chinese goods," Ryan McCrimmon reports for Politico. "There’s some hope that China could provide just enough assurances it would concede to President Donald Trump’s demands so the administration will delay a tariff hike — but there’s far more doubt that an eleventh-hour resolution can be reached."

Prices on grains and most other U.S. commodity crops were down this morning in anticipation of the tariff hike. Soybeans are in a particularly tough spot: "Soybeans are the United States' single biggest export to China, so prolonged negotiations and additional tariffs will hit the commodity hard," Anneken Tappe reports for CNN Business. "Soybean futures for July, the most active contract, were down 2.4% at $8.08 a bushel, while futures for May dropped 2.2% to $7.96, according to Refinitiv. Its putting the two closest contracts on track to log their worst one-day drop since October."

"This is a predicament for soy growers,” Davie Stephens, a soybean farmer from Clinton, Ky., and the president of the American Soybean Association, said in a press release. "We understand that Mr. Trump and his administration have broad goals they want to achieve for our country, but farmers are in a desperate situation. We need a positive resolution of this ongoing tariff dispute, not further escalation of tensions." Stephens warned that soybean growers' "patience is wearing thin" with the trade dispute and said "the financial and emotional toll on U.S. soybean farmers cannot be ignored."

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