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A Timeline for US-China Tariffs

Cash Grain Prices, Dow Jones Fell and Got Back Up Again

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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President Donald Trump has repeatedly tweeted for more than a year that China would buy more agricultural products from U.S. farmers while trade talks continue. To help farmers through the trade disruption, the Trump administration also approved a $12 billion aid package for farmers last summer, and a $16 billion aid package in May. (DTN file image)

OMAHA (DTN) -- This timeline of the U.S.-China trade dispute going back to July 2018 shows when the two countries imposed tariffs on each other as trade talks moved through fits and starts.

For more perspective from analysts and various agriculture groups on the now-year-long U.S.-China trade dispute, see "Tariff Anniversary" here: https://www.dtnpf.com/….

**

July 6, 2018: The U.S. and China impose 25% tariffs on each other. The U.S. announces plans to impose tariffs on $34 billion in goods immediately, then plans to add another $16 billion in products. China responds with 25% tariffs on $34 billion in goods, including U.S. soybeans. Market reaction was counterintuitive as November soybean contract rose 38 3/4 cents on the day the tariffs went into effect. Tariffs on pork, going back to April 2018, now reach 62%. Cash sales averaged $3.27 for corn and $8.17 for soybeans, according to DTN's national indexes.

July 11, 2018: U.S. Senate votes 88-11 on a non-binding resolution seeking greater role on determination of using tariffs for national security.

July 24, 2018: Trump administration announces a $12 billion aid package for farmers. Ag Secretary Sonny Perdue says support is in line with impact of "illegal retaliatory tariffs" by China.

Aug 1, 2018: Trump administration announces it would place 25% more tariffs on $200 billion in imports from China. By Aug. 3, 2018, China has responded with tariffs ranging from 5% to 25% on $60 billion more products from U.S.

Aug 23, 2018: U.S. imposes 25% tariffs on $16 billion in Chinese products, following through on a July announcement, and reaching $50 billion in products under tariff.

Sept. 1, 2018: New marketing year begins with just 1.39 million metric tons (mmt) in outstanding soybean sales to China, compared to 6.5 mmt a year earlier.

Sept. 4, 2018: Farmer enrollment begins for Market Facilitation Program payments. By July 2019, payments will reach $8.5 billion.

Sept. 20, 2018: DTN's National Soybean Index closed at $7.27, its lowest price in 11 years and priced $1.03 below the November contract, the weakest basis in at least 11 years. Cash corn was selling for an average of $3.08 a bushel based on DTN's National Corn Index.

Sept. 21, 2018: The Dow Jones Industrial Average (DJIA) reached 26,743, up nearly 9% since early July.

Sept. 24, 2018: Trump administration imposes 10% tariffs on $200 billion in products from China and threatens to go to 25% tariffs on Jan. 1, 2019. China counters by following through on its tariffs against $60 billion in U.S. goods. At this point, the U.S. has tariffs on $250 billion total products from China, and Beijing has imposed tariffs on $110 billion in U.S. goods.

Oct. 1, 2018: U.S. and Canada reach a trade deal with President Donald Trump calling it the U.S.-Mexico-Canada Agreement, or USMCA. The three countries later sign the new trade deal at the G-20 summit in Argentina.

Dec. 1, 2018: President Trump and Chinese President Xi Jinping reach a deal at G-20 summit in Argentina. U.S. agrees not to raise 10% tariffs on $200 billion in Chinese products on Jan. 1, 2019. Agreement sets a 90-day deadline for negotiations on further trade issue. President Trump says, "And China will be buying massive amounts of product from us, including agricultural from our farmers -- tremendous amount of agricultural and other products."

Dec. 21, 2018: The DJIA has slid to 21,792 since September, a 19% drop since September.

Dec. 31, 2018: DTN's National Corn Index was $3.41 and the National Soybean Index was $8.

Dec. 22, 2018-Jan. 25, 2019: The federal government is shut down over border wall funding.

Feb. 22: Agriculture Secretary Sonny Perdue tweets, "In Oval Office meeting today, China has committed to buy an additional 10 million metric tons of U.S. soybeans. Hats off to @POTUS for bringing China to the table. Strategy is working. Show of good faith by the Chinese. Also indications of more good news to come."

Feb. 24: With possible 25% tariffs on China looming, President Trump tweets that talks will continue without new tariffs imposed. "I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!"

Feb. 28: U.S. wins WTO case against China over wheat and rice subsidies from 2012-2015 that exceeded China's subsidy commitments.

March 13: Massive storms hit the Midwest, setting up a disastrous planting season for corn and soybean farmers. A "bomb cyclone" hits Plains states, sparking widespread flooding of icy rivers in Nebraska, Colorado and South Dakota, leading to dozens of levee breaches along the Missouri River.

April 26: Archer Daniels Midland expects stronger second-half results with optimism that the U.S.-China trade dispute will end before the fall harvest. ADM said that would boost soybeans, corn and ethanol trade flows.

May 10: With no breakthrough in talks, President Trump raises a 10% tariff on $200 billion in Chinese goods up to 25%. The president also said he is willing to support $15 billion in additional trade-aid payments to farmers. The president also begins action to place additional 25% tariffs on $300 billion more in Chinese goods.

"Tariffs will bring in FAR MORE wealth to our country than even a phenomenal deal of the traditional kind. Also, much easier and quicker to do. Our farmers will do better, faster, and starving nations can now be helped. Waivers on some products will be granted, or go to new source!"

May 23: USDA announces a $16 billion aid package for farmers that requires farmers to plant a crop during one of the hardest planting seasons in recent memory. USDA will pay crop farmers based on a single county payment rate multiplied by a farm's total planted acres in 2019.

June 17: DTN's National Cash Corn Index hits its highest price in five years, settling at $4.33. The DTN National Cash Soybean Index hits $8.38 a bushel on June 20, the highest since July 31, 2018.

June 19: Mexico ratifies the USMCA, becoming the first country to do so.

June 29: President Trump tweets he met with Chinese President Xi Jinping at the G-20 summit in Japan and pledges to hold off on 25% tariffs against $300 billion more in Chinese products as negotiations will restart. Calling farmers "patriots," the president said, "And China is going to be buying a tremendous amount of food and agricultural product, and they're going to start that very soon, almost immediately. We're going to give them lists of things that we'd like them to buy."

July 3: DTN's National Cash Corn Index settles at $4.03, a 30-cent decline since mid-June. The DTN National Cash Soybean Index is $8.04 a bushel, a 32-cent drop since that time. The DJIA closes at a record high of 26,966.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG)

Chris Clayton

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