1. How Will the Trade War Affect Food Sector?
Beijing's tariffs will have the biggest impact on soybeans, the US’ top agricultural export to China in 2017 worth about $12.7 billion, hurting US farmers in states such as Iowa and Texas, which backed Republican President Donald Trump in the 2016 election.
The vessel, Peak Pegasus, carrying 70,000 tonnes of the US oilseed for state grain trader Sinograin, was due to arrive in the port of Dalian at 5 pm on Friday, just hours after the duties went into effect.
In the months ahead though, China will struggle to replace the US beans, forcing processors, which crush the beans to make oil and animal feed, to pay the extra duty or find substitutes.
Rabobank reckons China may have to buy up to 15 million tonnes of US beans at tariff prices. Crushers may not pass on the inflated cost at least in the short term, further eroding their already low margins, the bank said in a research note.