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U.S., China reach soybean deal; no plan to extend tariff deadline

TU Curmudgeon

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From United Press International

U.S., China reach soybean deal; no plan to extend tariff deadline

Jan. 31 (UPI) -- The United States and China came to an agreement on the sale of soybeans Thursday, as both sides seek to reach a deal before increased tariffs take effect.

Trump announced that China agreed to purchase 5 million tons of U.S. soybeans after holding two days of discussions with a Chinese delegation including Vice Premier Liu He. They planned to set up another meeting between Trump and Chinese President Xi Jinping in the future.

"We've made tremendous progress," Trump said of the negotiations.

COMMENT:-

Mr. Trump deserves credit for getting back between one third and one half of the normal volume of soybean sales that had been lost, but, since it appears that the sale price is still below cost of production, I'll hold off unreserved congratulations until it is clearer whether the US is going to make a profit or simply lose less.

PS - If you read between the lines, this sale looks suspiciously like "tiding China over until the alternative (non-America) sources come on line" - but, I always was a cynic.
 

Chomsky

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From United Press International

U.S., China reach soybean deal; no plan to extend tariff deadline

Jan. 31 (UPI) -- The United States and China came to an agreement on the sale of soybeans Thursday, as both sides seek to reach a deal before increased tariffs take effect.

Trump announced that China agreed to purchase 5 million tons of U.S. soybeans after holding two days of discussions with a Chinese delegation including Vice Premier Liu He. They planned to set up another meeting between Trump and Chinese President Xi Jinping in the future.

"We've made tremendous progress," Trump said of the negotiations.

COMMENT:-

Mr. Trump deserves credit for getting back between one third and one half of the normal volume of soybean sales that had been lost, but, since it appears that the sale price is still below cost of production, I'll hold off unreserved congratulations until it is clearer whether the US is going to make a profit or simply lose less.

PS - If you read between the lines, this sale looks suspiciously like "tiding China over until the alternative (non-America) sources come on line" - but, I always was a cynic.
A did a little quick Googling for my own reference - not to fact-check you - and my source claims the market is normally 30-35M tons.

But regardless of the actual number, we lost X, but only got some minority percentage of X back. Not sure how this is a win, unless we count the potential to win on other fronts. But as we saw with the recent Mexico & Canada trade talks, potential can be either "realized" or "unrealized".

And regardless of other ancillary potentials, this has caused China to develop the South American and other infrastructure to side-step America. In design engineering for mass market products, there's essentially a cardinal rule:

"don't spec single-sourced components".

That rule is a really big deal. I suspect China will never single or predominately source soybeans from America, again. In addition, they now are gaining geo-economic power over their (new) supplier states.
 

TU Curmudgeon

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A did a little quick Googling for my own reference - not to fact-check you - and my source claims the market is normally 30-35M tons.

But regardless of the actual number, we lost X, but only got some minority percentage of X back. Not sure how this is a win, unless we count the potential to win on other fronts. But as we saw with the recent Mexico & Canada trade talks, potential can be either "realized" or "unrealized".

And regardless of other ancillary potentials, this has caused China to develop the South American and other infrastructure to side-step America. In design engineering for mass market products, there's essentially a cardinal rule:

"don't spec single-sourced components".

That rule is a really big deal. I suspect China will never single or predominately source soybeans from America, again. In addition, they now are gaining geo-economic power over their (new) supplier states.

There was some talk of another 10 million tons so, in an attempt to find something praiseworthy I used the same type of statistical basis that Mr. Trump's supporters use ("If there is a conflict between what actually is and what I would like it to be - I'll go with asserting what I would like reality to be as a fact.")

"Single source" has a flip side and that is "customer concentration" (the "Wal*Mart Effect"). That really comes into effect when an enterprise is heavily reliant on a single customer for the majority of its output and then the customer says (in effect) "Gosh, it's been really nice doing business with you, but I can get a better deal from someone else (and they are going to be selling to me at a price that roughly approximates your cost of production) - see ya.". Jut ask Rubbermaid how it works.
 

Hatuey

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That's okay, soybean farmers can now learn to grow tulips instead.

:)

Sent from Trump Plaza's basement using Putin's MacBook.
 

TU Curmudgeon

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That's okay, soybean farmers can now learn to grow tulips instead.

:)

Sent from Trump Plaza's basement using Putin's MacBook.

And Mr. Trump can put tariffs on those foreign tulips from the Netherlands so that he can cut taxes in order to subsidize American tulip growers.
 
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