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Des Moines Register: "China Tariffs Could Cost Iowa Farmers Up to $624 million"

Iowa farmers are upset over Trump's tariff policy. Soybean exports will drop and the price is already falling.

Perhaps Iowa farmers' biggest fear is becoming a harsh reality: The escalating U.S.-China trade dispute erupted Friday, with each country vowing to levy 25 percent tariffs on $50 billion in goods.

U.S. and Iowa agriculture is caught in the crossfire, with farmers selling $14 billion in soybeans to China last year, its top export market.

Soybeans are among hundreds of U.S. products China has singled out for tariffs. The U.S. has an equally long list that includes taxing X-ray machines and other Chinese goods.

Iowa farmers could lose up to $624 million, depending on how long the tariffs are in place and the speed producers can find new markets for their soybeans, said Chad Hart, an Iowa State University economist.

U.S. soybean prices have fallen about 12 percent since March, when the U.S.-China trade dispute began.

Iowa is the nation's second-largest soybean grower, producing 562 million bushels last year worth $5.2 billion.

"It will slow down the market. Even with the tariffs in place, we will ship a lot of soybeans to China," Hart said. "It just won't be nearly the amount we did before.

China's Retaliation List

The $624 million figure is for soybeans alone. Iowa is hit by other products on China's retaliation list.

China's tariff list contains beef, pork, wheat, and corn.

Mike "Mish" Shedlock

Stuki wrote: “Instead of insisting on thinking (more like 'feeeeeling' your way) like a little girl …”.

When you don’t have a credible argument, attack the other person, heh?

Yes, political economy is about efficiency; but also about more than efficiency. Sadly, so many free traders end up sounding like those academic anti-American faculty lounge lizards relaxing in their taxpayer-provided Ivory Towers droning on about how Communism is the best economic system. Yes, in theory, Communism is the best economic system -- but only in theory. In reality, every Communist regime has ended up as a nasty dictatorship which has made life much worse for its citizens. Obviously, the theory is incomplete.

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To paraphrase the great statistician George Box – ‘All theories are wrong; some theories are useful’. The theory of Comparative Advantage is useful to a certain extent, but it neglects many factors we are aware of from the real world. For example, what happens to the supposed consumer price benefits when the efficient producer clears out the competition and achieves a monopoly? Read up on the history of Standard Oil, and why anti-trust legislation was instituted.

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History also tells us that large trade imbalances are unsustainable – and can end up being corrected in very unpleasant ways. The last time China ran a huge trade surplus was with the British Empire in the 1800s. The English responded by creating a market in China for opium sourced from English colonies in India. When the Chinese Emperor objected, the English then invaded China – twice! – to ensure they could continue to sell drugs. Of course, even Crooked Hillary would not have responded to today’s Chinese trade surplus by shipping meth to China; but the historical lesson stands that unsustainable trade surpluses end in tears.

Looking at the world today, it is clear that free traders have lost the battle in terms of public support … and even elite support. Think about the utter silence that greeted President Trump’s proposal at the G7 for a tariff-free world. My guess is that committed free traders would be better advised to push initially for reciprocal fair trade as a necessary step towards the long-term Trumpian goal of genuine multi-lateral free trade.

In what kind of "theory" is communism the "best" economic system???????? You're confusing theory with pure childish fantasy here. Again, it ain't that hard: Just look at efficiency: Unless any and all who has a hunch he can do something more efficient than how it's currently done; is fully unrestricted in putting his hunch to the test, efficiency suffers. Communism is all about restrictions. Hence has nothing to do with "best" of anything. Never did, never will. It was a progressive joke from the get-go, nothing more than yet another in a never ending line of Newspeakian attempts at excusing why some group of more equals should somehow rule their mere equal underlings.

Instead, what "system" is the best economically, is the same one that is best in all other ways. Pure, simple, unrestricted freedom. Think Jedediah Smith in the Rockies, '49ers in San Francisco. Not a darned five year plan, nor any other form of government anywhere in sight. That's what great societies are built from. While governments, laws, regulations and privileged institutions are what destroys them. America being a perfect example of both in action: From wilderness to the greatest country ever in a century of the first; then right back down to some dystopian TrumpObamastan in a century and a half of the latter.

Until you hear people crying in the street, complaining that they are just too free; that noone steals their stuff, noone harasses them and noone bans them from doing what they want to do, you can be pretty confident freedom is "the best system." Nothing else. Freedom to say and write what you want. To build what you want where you want. To buy what you want from whomever you want to. That's the "best system," period. In all ways. That it is also the best economically, is just a special case of thatt more general.

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