WASHINGTON — The past few weeks have seen trade disputes and retaliation actions ratchet up, as prices for commodities that will be affected by what seems more and more like a trade war spiral down.
“I think the market is looking at the trade issues more realistically at this point,” said Mike Zuzolo from Global Commodity Analytics. ”For instance, between the pork tariffs to China took effect in April and the duties that are on our pork, we are now up to 88% as far as a duty/tariff on U.S. pork going into China.”
That is not including another increase in pork tariffs coming on July 6th, if the U.S. follows through on further tariffs threats against one of our largest trading partners.
“My assessment is pretty simple. We have gone low enough fundamentally to factor in the current tariffs,” Zuzolo said. “If we do go through with more tariffs next month, we have more downside because there is potential for the artificial intelligence algo-trading to wind up again and take us to new lows.”
Zuzolo said that if President Trump does press the button on July 6th and move forward with further tariffs and escalate the situation, history suggests that it takes a long time to unwind the damage that the move could possibly do.
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–Global Commodity Analytics & Consulting