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Mosby

(19,491 posts)
6. soybeans are seasonal
Sun Mar 25, 2018, 12:28 PM
Mar 2018

In order to ensure a year round supply China need American soybeans to feed their pigs and make cooking oil.

World demand is way up for soybeans, and China is the single largest importer. Because of that the elasticity of demand is low, so tariffs WILL be passed onto the Chinese buyers and their people will suffer as a result.


I found this recently, pretty interesting:

The U.S.-China Economic Relationship: Separating Facts from Myths

Myth No. 1: Washington has limited leverage because China is the main "banker" for the United States

Myth No. 2: The United States is heavily dependent on cheap Chinese goods


This is not really true. Only roughly 15 percent of U.S. imports come from China. Moreover, all of the basic types of manufactured consumer goods that China exports to the United States (clothing, textiles, footwear, toys, small appliances, etc.) can be imported from other countries or could be produced domestically. [high elasticity of demand, aka we don't really need the shit] The prices for goods that could substitute for products from China would be higher, but the difference in costs would be relatively small. Competition among producers has become fiercer, and as a result cost differentials between goods from China and other suppliers are narrowing.

Dependence actually runs the other way. China is highly dependent on U.S. demand for its products. Economic growth in China is heavily dependent on exports. Although China has been able to achieve its 8 percent GDP growth target in 2009 owing to the stimulus to domestic demand provided by government policy actions, the country will struggle to meet this objective in 2010 and succeeding years if demand for its exports in the United States does not pick up.

Myth No. 3: External pressure on China for policy changes is counterproductive.

Myth No. 4: Instability is bad for China

https://www.cfr.org/expert-brief/us-china-economic-relationship-separating-facts-myths

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