Cash cows and rising stars: sizing up the commodities in the US-China trade war

China retaliated against US tariffs on July 6, with its own 25% tariffs on imports of US food products, agricultural commodities and motor cars. It has drawn up a second list that targets $16 billion of US energy commodities, chemicals and medical equipment. No date for the additional tariffs has been set, but it could happen as early as two weeks’ time. But not all commodities are traded equally, and some tariffs will hurt a lot more than others. The chart shows the value and annual export growth of US commodities that will be subject to Beijing’s tariffs. By way of comparison it also shows LNG, which is off the table for now. The size of the bubble in the chart represents the value of the commodity exported from the US to China last year in billion dollar terms. The cash cow is soybeans. Last year, US shipments to China were worth nearly three times the value of crude oil. They were even worth more than the value of motor vehicle exports. Despite all the hype, LNG exports were worth just 3% of soybean exports to China. But like all cash cows, soybeans have seen little growth. In fact, the… continue reading

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Source: CTRM Center

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