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| If the Chinese want to beat down the Brazil price, there's no better way than buy at least a few US beans.
I'm assuming that the Chinese will drop their tariffs and maybe live with the current 10% tariffs on the first $250 billion of their exports to us. Why do I think they will tolerate the 10% tariff? Because it doesn't make much of a difference. For example, I can buy a chainsaw carburetor repair kit from China with free shipping for $3 and get it in three weeks. I can buy the exact same kit from California for $6, again free shipping and get it in a week. I just have to decide how soon I need the kit. A 10% tariff on the kit will increase the cost by 30 cents. The US distributor can eat the tariff, share the tariff with me or charge me the whole tariff but it doesn't matter, it only adds 5% to the price.
Xi can afford to be generous now. Except for the 90 period, trump totally capitulated. Sorry to say, but he's achieved none of his big three issues. But the 90 days will turn into 180 days and then two years if Xi keeps trump happy. And the way to keep trump happy is to buy soybeans. But that's fine because China needs the soybeans.
But "see'n is believe'n" so I guess we'll just wait a few days and see what happens. | |
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Ok trade dilemma Marketing question
