Scottsdale Sooner

[bullmarket]

Since the other thread about trade is so cluttered with other topics I have trade questions for you.
With your life experiences involving trade I truly respect your comments and expertise on the topic of trade.

The one think you did not mention or I missed it what about trade wars especially if they are in effect for extended periods of time which can be very harmful to US companies and US farmers.

You did say that the US government will give them subsidies to make up for what they lose.
I question this. The reason I question this is that the U.S. now has a huge 21 Trillion dollar deficit
This is so unlike the GOP who usually fight high Government spending. The congress would not pass a new bill in my opinion to vote the huge amount of money necessary to cover farmer deficits and US companies deficits in a prolonged trade war.
In Iowa alone the Des Moines newspaper in their headlines Saturday had an economist's estimate of 640 Million dollars loss for farmers for just this one state. In all states the losses could be as high as 2 Trillion Dollars or more..

The countries who Trump put Tariffs on, have already retaliated in kind with many different US products like Kentucky Whiskey and Harley Davison motorcycles and US beef and pork and corn.
Mexico which imports a lot of our corn has Tariffs on it. We export oil now and it is on the tariff's list.
China now has put 38 million of Tariffs on many US business and they said they will add more if Trump continues to raise Tariffs on them. Trump hs mentioned he might put 150 million in tariffs to China alone.

Historically Republicans are free traders which I am also.

You seem to me to be downplaying the bad effects of extended trade wars. In my opinion I do not think the US Government will subsidize companies and farmers (like you stated earlier) for trade war losses. . Maybe in the past but not now as our Trillions of dollars US deficit is so huge.

You sound Like Trump advisor Peter Navarro to me who is strongly pro tariff but I could be wrong thinking that. Navarro is in a small minority of economists being so strongly for tariffs. He influenced Trump to end trading organizations PPP and NAFTA for the U.S. He also had Trump get out of the Paris Climate Accord in which every country in the world in in it except for The U.S. and Guatamala

I am looking forward to your thoughts on trade and trade wars which Trump now has with several different countries and what you think would happen if trade wars will last for extended periods of time. Also do you always think the U.S. Government will subsidize the trade war losses if they occur. in this period of time in our history.

We can talk about this in a civil manner and I have a large respect for your trade views and your trade experiences.​

 

[veritas59]

https://www.realagriculture.com/201...-percent-of-producer-returns-says-new-report/

 

[bullmarket]

https://www.realagriculture.com/201...-percent-of-producer-returns-says-new-report/

Thanks my friend Veritas.
That was very interesting. i wonder if the Daily industries still gets subsidies under the Trump administration and our congress. The article mentioned NAFTA which is now basically gone as Trump disliked it and Congress has done nothing to keep it going.
Thank you again.

 

[veritas59]

Thanks my friend Veritas.
That was very interesting. i wonder if the Daily industries still gets subsidies under the Trump administration and our congress. The article mentioned NAFTA which is now basically gone as Trump disliked it and Congress has done nothing to keep it going.
Thank you again.

They've received subsidies for years. We would no doubt have heard about it had it ceased.

 

[bullmarket]

They've received subsidies for years. We would no doubt have heard about it had it ceased.

Accordi

They've received subsidies for years. We would no doubt have heard about it had it ceased.

Thanks.
Justin Trudeau. the Prime Minister of Canada stated that Dairy tariffs for US Dairy products quoted as being very high are wrong. In fact he said instead of having a Trade deficit with the US, actually the US has a trade surplus with Canada

Its a shame that the U.S. now is in conflict and in a trade war with Canada our very best friend in the world.

 

[Scottsdale.Sooner]

Bull, firstly give me an example of an extended trade war that was not associated with a war. Not something from the liberal newspapers but basis in fact. You will be hard pressed to find something defined as a trade war. What is being lost here is that tariffs do not end trade, it alters the price to the end user. Tariffs most often are absorbed into the market prices to the end buy/user. The US produces exports about $23 billion in soya beans per year. This is not expected to change dramatically if China adds a 20% tariff. $2 trillion is a ghost story. If we never exported another bean that is ten years of production. Complete rubbish reporting. China has a huge industry that depends on soya beans. China will not strangle those businesses. Subsidies are a constant within our agriculture industry. Cotton farmers used to get very large subsidies until Reagan cabinet established a trade route with India. If they want to import cheap clothing into the US then it must be with fabric woven from US cotton. I can assure you that the demand for Kentucky whiskey and Harley's will outweigh any tariffs. Unbridled trade has nearly killed US manufacturing. The quickest means to bridle are tariffs on specific products. I was all for pulling out of the Paris Accord as well. The US pays while the largest polluters pay zero.

 

[BillyRay]

Bull, firstly give me an example of an extended trade war that was not associated with a war. Not something from the liberal newspapers but basis in fact. You will be hard pressed to find something defined as a trade war. What is being lost here is that tariffs do not end trade, it alters the price to the end user. Tariffs most often are absorbed into the market prices to the end buy/user. The US produces exports about $23 billion in soya beans per year. This is not expected to change dramatically if China adds a 20% tariff. $2 trillion is a ghost story. If we never exported another bean that is ten years of production. Complete rubbish reporting. China has a huge industry that depends on soya beans. China will not strangle those businesses. Subsidies are a constant within our agriculture industry. Cotton farmers used to get very large subsidies until Reagan cabinet established a trade route with India. If they want to import cheap clothing into the US then it must be with fabric woven from US cotton. I can assure you that the demand for Kentucky whiskey and Harley's will outweigh any tariffs. Unbridled trade has nearly killed US manufacturing. The quickest means to bridle are tariffs on specific products. I was all for pulling out of the Paris Accord as well. The US pays while the largest polluters pay zero.

Great posts man!! I don't know enough about trade and economics to really make a certain judgment on whether Trump is doing the right thing or not with the tariffs. So your posts and explaining in this thread and the other are VERY enlightening on the subject.

 

[Scottsdale.Sooner]

I am currently in Nigeria. Our operational processes requires thousands of tons of bulk cement and iron ore fines. Cement is manufactured in Nigeria and plentiful. Iron ore is mined in Nigeria and a good distance from where we need it to be. Trucking is the only means of delivery hundreds of miles. We need thousands of tons per month which Nigeria simply cannot provide. Nigeria had extreme tariffs on importing iron ore. We have one competitor that is Argentinian by nationality. The two of us agreed to buy all the iron ore Nigeria can produce on an annual basis at about $250/ton. By committing to this purchase we were allowed to negotiate away the tariff that protected the local mines. We use about 10% local and 90% imported at $120/ton. It took us about two weeks to put the deal together with the Nigerian Minister of Trade with the support of the major oil companies. We have an annual escalation clause of no more than 3.5% annually that protects our long term pricing and guarantees the Nigerian mines a five year backlog of supply. We save million by securing the balance of supply from foreign sources. This is one example of how tariffs can be negotiated away.

 

[Scottsdale.Sooner]

Bull, I respect your opinion and your view on the matter. Every circumstance will have a different undertow. There is so much that goes on behind the scene of these trade disputes but they normally dissipate with little or no substantial impacts to economies. The US imported $1.2 billion a year in steel products during Obama years with US steel workers unemployed. Trump has put the brakes on this. I cheer his efforts to put Americans back to work.

 

[bullmarket]

I am currently in Nigeria. Our operational processes requires thousands of tons of bulk cement and iron ore fines. Cement is manufactured in Nigeria and plentiful. Iron ore is mined in Nigeria and a good distance from where we need it to be. Trucking is the only means of delivery hundreds of miles. We need thousands of tons per month which Nigeria simply cannot provide. Nigeria had extreme tariffs on importing iron ore. We have one competitor that is Argentinian by nationality. The two of us agreed to by all the iron ore Nigeria can produce on an annual basis at about $250/ton. By committing to this purchase we were allowed to negotiate away the tariff that protected the local mines. We use about 10% local and 90% imported at $120/ton. It took us about two weeks to put the deal together with the Nigerian Minister of Trade with the support of the major oil companies. We have an annual escalation clause of no more than 3.5% annually that protects our long term pricing and guarantees the Nigerian mines a five year backlog of supply. We save million by securing the balance of supply from foreign sources. This is one example of how tariffs can be negotiated away.

Very interesting Scottsdale. I truly respect your expertise.

Also don't play the Nigerian Lottery.

Just joking!

 

[bullmarket]

Bull, firstly give me an example of an extended trade war that was not associated with a war. Not something from the liberal newspapers but basis in fact. You will be hard pressed to find something defined as a trade war. What is being lost here is that tariffs do not end trade, it alters the price to the end user. Tariffs most often are absorbed into the market prices to the end buy/user. The US produces exports about $23 billion in soya beans per year. This is not expected to change dramatically if China adds a 20% tariff. $2 trillion is a ghost story. If we never exported another bean that is ten years of production. Complete rubbish reporting. China has a huge industry that depends on soya beans. China will not strangle those businesses. Subsidies are a constant within our agriculture industry. Cotton farmers used to get very large subsidies until Reagan cabinet established a trade route with India. If they want to import cheap clothing into the US then it must be with fabric woven from US cotton. I can assure you that the demand for Kentucky whiskey and Harley's will outweigh any tariffs. Unbridled trade has nearly killed US manufacturing. The quickest means to bridle are tariffs on specific products. I was all for pulling out of the Paris Accord as well. The US pays while the largest polluters pay zero.

Scottsdale this is not from a liberal newspaper. Trump today escalated a trade war
saying he would add tariffs to 200 BILLION MORE OF CHINA PRODUCTS.

CHINA SAID THEY WOULD RETALIATED.

Trump said he is doing this to respond to China putting Tariffs on US goods. China said they put these tariffs on the US in response to Trump first putting tariffs on China.

Here we go with the Tariff merry-go-round.
Trump first put Tariffs on China,
China responds putting Tariffs on US.
Trump now retaliates with a large 200 Billion dollar Tariff on China
China said the will now put more Tariffs on US with a huge number

I mentioned in an earlier post to you this is what I was afraid of because of Trump's strike back mentality and it is exactly happening.

Will Trump retaliate again to China's new 200 Billion in Tariffs?

https://www.msn.com/en-us/money/mar...-tariffs-on-dollar200-bln-in-goods/ar-AAyPuJw

This could get dangerous.

 

[Scottsdale.Sooner]

Scottsdale this is not from a liberal newspaper. Trump today escalated a trade war
saying he would add tariffs to 200 BILLION MORE OF CHINA PRODUCTS.

CHINA SAID THEY WOULD RETALIATED.

Trump said he is doing this to respond to China putting Tariffs on US goods. China said they put these tariffs on the US in response to Trump first putting tariffs on China.

Here we go with the Tariff merry-go-round.
Trump first put Tariffs on China,
China responds putting Tariffs on US.
Trump now retaliates with a large 200 Billion dollar Tariff on China
China said the will now put more Tariffs on US with a huge number

I mentioned in an earlier post to you this is what I was afraid of because of Trump's strike back mentality and it is exactly happening.

Will Trump retaliate again to China's new 200 Billion in Tariffs?

https://www.msn.com/en-us/money/mar...-tariffs-on-dollar200-bln-in-goods/ar-AAyPuJw

This could get dangerous.

Bull, read the content of this article closely. 10% on $200 billion in goods. That means you will pay $11 for an item that cost $10 last month. They talk about the value of the goods and not the value of the tariffs themselves. 10% is nothing in the grand scheme of things......30% to 100% is when things get tough to maneuver.

 

[Scottsdale.Sooner]

Bull, I personally know the group (family) that has the Nigerian Lottery concession. I didn't know there was a Nigeria Lottery until I met them under different circumstances. There is a considerable amount of wealth in Africa that flies under the radar. As in many places in the world, it's not what you know but who you know that determines your success. (PS: I don't do lotteries until the Power Ball reaches $500 million then I can't help myself).

 

[bullmarket]

Bull, read the content of this article closely. 10% on $200 billion in goods. That means you will pay $11 for an item that cost $10 last month. They talk about the value of the goods and not the value of the tariffs themselves. 10% is nothing in the grand scheme of things......30% to 100% is when things get tough to maneuver.

Here is where it could really become a big problem.
According to U.S. data, China imported $129.89 billion of U.S. goods last year, while the U.S. purchased $505.47 billion of Chinese products

China instead of adding more billions of tariffs to Trump instead raises the Tariff to 30% or 40%
of the 129.89 billion they import or even refuse all of our soybeans. You may say they would never do that as they need them but they could look at other sources

This would be devastating

 

[bullmarket]

.

 

[bullmarket]

Bull, read the content of this article closely. 10% on $200 billion in goods. That means you will pay $11 for an item that cost $10 last month. They talk about the value of the goods and not the value of the tariffs themselves. 10% is nothing in the grand scheme of things......30% to 100% is when things get tough to maneuver.

China instead of adding more billions of tariffs retaliating to Trump instead retaliates by raising the tariffs to 20% of the 129.89 billion they import or even refuse all of our soybeans. You may say they would never do that as they need them but they could look at other sources

This would be devastating

 

[tjc8214]

China instead of adding more billions of tariffs retaliating to Trump instead retaliates by raising the tariffs to 30% or 40% of the 129.89 billion they import or even refuse all of our soybeans. You may say they would never do that as they need them but they could look at other sources

This would be devastating

Let me guess you were screaming Trump is going to start World War III!

Step away from the ledge, your starting to sound like Nancy Pelosi.

 

[bullmarket]

Scottsdale another factor is what happened today. Soybean Futures with all of the trade war talk, were down this morning 5%.
The price drop will hurt Soybean farmers. in addition to possible tariffs.

 

[Scottsdale.Sooner]

Scottsdale another factor is what happened today. Soybean Futures with all of the trade war talk, were down this morning 5%.
The price drop will hurt Soybean farmers. in addition to possible tariffs.

Come on Bull! You are more clever than what you are leading us to believe here. These are commodities traders, speculators. They buy and sell to make money. These future prices have indexes from a base price today. The farmer is under no obligation to sell their beans at a locked in price in the future. These are soya bean gamblers same as crude futures, sugar, wheat, corn etc. Example: You and I pitch in $10,000 each to buy soya bean to be harvested in 2020. We buy ahead at $100 per ton. We have 200 tons. In 2020 the beans are selling for $150 ton we make 50% profit. If they are selling for $80 ton we lost 20%. The farmer would have sold to the market at $70 ton and the commodities holders make or lose. The sale price is normally controlled by supply and demand. The key is to sell 100% of the product and a profitable rate. This is controlled by people like Monsanto or General Foods, etc. Don't grow more than they can sell. The two biggest growers of soya beans is USA and Brazil by a very large margin. The USA and Brazil grow more for export than all other countries combined. I simply do not see a 20% tariff effecting the farmers prices at the market. There are many middle men between grower and buyer that will absorb tariffs. It's the system. There are no indicators that point to the farmer substantially reducing their price to accommodate a tariff. When economist talk about reduction in gross revenue of commodities they cannot say the farmer will absorb the losses. Simply not true. Check the cost of soya beans at the farm per ton versus what end buyer pays. I don't know what it is but I bet it will shock you and me. The weather will have a bigger impact on the price of soya beans than a tariff.

 

[Scottsdale.Sooner]

Let me give you another example of how this can work. High end French wine. A vineyard will sell futures in wine stock. Normally out by 4 or 5 years. They know their cost of production every year regardless of what the wine sells for. They sell bottles of wine to speculators at cost plus mark up. They will make money regardless of the market at the time of harvest. For one reason or another (normally weather) the wine gets low marks and doesn't attract top end prices. We bought high and sold low. We lost. On the other hand we paid $10 bottle and all conditions were right for excellent wine. We sell at $40 bottle one year after bottling or $100 bottle ten years after bottling. We gamble but the vintner gets his price. The vintner normally sits on 40% to 50% of his harvest when early indicators are in his favor.

 

[iasooner1]

BOOOOOOMerrrrrrrrrr !!!!!!!!

John says hi. Also, "Senior what are you wearing ?" (I kind of tried to talk him out of this) The good news I suppose, we survived to see a new day....