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Grain markets respond to EU tariff reversal
An extension ag economist says the grain markets have responded to President Trump’s decision to reverse a 50 percent tariff on the European Union.
Ben Brown at the University of Missouri tells Brownfield…
“These are two major economies that could really change the growth projections of the global economy. If the global economy is slowing down, it weakens consumption for high valued products like beef and pork, along with other products that use corn and soybeans as an input in their production practices.”
Brown says the EU is a buyer of U.S. corn and soybeans, but not in large quantities. He says geographical non-tariff barriers are the big focus for U.S. agriculture.
“What’s considered a product that’s produced outside of a certain region? Can it be called the same thing? What’s production standards, in terms of how a product is produced?”
Last week, President Trump threated the EU with a 50 percent tariff starting June 1, because the lack of progress in trade negotiations. Over the weekend, President Trump said he would return to July 9 as the end date for negotiations.
Brown says the back-and-forth trade strategy could continue to affect the grain markets as other trade negotiations happen.
“This type of language draws market reaction, but it also seems like as we’ve moved along in this process, the market reaction, especially in the grain and oilseed markets, has become more subdued to these announcements so we’re not seeing as big of fluctuations.”
Brown says as negotiations continue with other countries, U.S. agriculture is watching for anything that can serve as a bellwether for other type of trade frameworks or agreements.
