Trade

Report: Trump’s Trade War Also Causing Problems for Traders, Shipping

JM Ashby
Written by JM Ashby

The impact of Trump's trade war on farmers has been covered extensively over the past six months and Trump is pouring billions into a bailout to save (some of) them, but what about the trade war's effect on the ancillary industries that facilitate exports?

With China canceling all of their orders for American crops, crops that would normally flow from the Midwest to the Pacific Northwest where they would be exported to China are flowing to the Gulf of Mexico instead.

That leaves traders in the Northwest scrambling for products to export and right now they're settling for corn even though it's less lucrative than the soybeans China has stopped buying.

From Bloomberg:

Soybeans that usually get sent by rail to the Pacific Northwest ports for export are now moving by train to areas near the Mississippi river, where they get put on a barge to the Gulf, according to Jim Sutter, CEO of the U.S. Soybean Export Council. St. Louis is one of the common spots for that, he said. [...]

"In the short term, dislocations caused by tariffs create arbitrage opportunities that well-positioned merchants and shippers can benefit from," Corey Jorgenson, president of the grain unit of The Andersons Inc. "Long term, the trade war is bad for our business and is really bad for U.S. farmers.” [...]

Monte Peterson, who farms both corn and soybeans on 4,500 acres in Valley City, an hour away from Fargo in North Dakota, says his local elevator is sending corn by rail to the Pacific Northwest instead of the usual soybeans, which can sell for two to three times more.

“There are sales for corn and the opportunity to ship corn to the Pacific Northwest, at least in these nearby months," Peterson said. "So that’s the only salvation, I guess.”

I believe this is emblematic of the idea that Trump's trade war will permanently alter the global economy even when it's over. And not for the better.

It's not just the fact that other countries will replace their imports to avoid American volatility. Domestic traders and vendors may also retool their operations because certain markets have been closed off by Trump.

  • muselet

    When Donald Trump has once and for all devastated American agriculture and all associated industries, not to mention the world economy, I wonder who he will blame for the economic aftermath.

    China? The Ds? Brown people? Socialists? Iran?

    All I know is that “economic anxiety” will no longer necessarily be a euphemism.

    –alopecia

  • gescove

    Who would’ve thought that economic ripple effects and the law of unintended consequences would apply to Trump’s “good and easy-to-win” trade wars?