Trade war losers

Chart of the week

The U.S.-China trade war has already led to a collapse of soybean exports.

What started as a trade conflict is increasingly developing into a trade war. In the beginning, there were tariffs on select goods, such as washing machines, solar panels and aluminum. Increasingly, the scope for punitive tariffs has widened, amid threats to levy tariffs on all Chinese goods shipped to the United States. Due to the comparatively small amount of U.S. exports to China, it proved more difficult for Beijing to retaliate with tariffs alone.                               

But China found ways to inflict significant pain to the United States, for example by sourcing its supply for soybeans from other countries. As our "Chart of the Week" demonstrates, U.S. exports of this commodity to China dropped by a whopping 80%. "No wonder that U.S. farmers are suffering, with poor weather conditions adding to their pain," points out Darwei Kung, Head of Commodities at DWS.

All eyes are on both presidents now, as they are expected to sit down for negotiations at the G20 meeting in Osaka. Let's hope that they can find some sort of compromise. If not, the economic pain could well extend to other sectors of the U.S. economy and beyond.

Sources: Bloomberg Finance L.P., DWS Investment GmbH as of 6/1/19

* 12-month rolling total

font

CIO View

Cookies Policy

This website uses cookies in order to improve user experience. If you accept, we will assume that you are happy with this. For more information about the cookies we use or to find out how you can change your settings, see our Cookies Notice.
Accept All Cookies

Other country

Other country

Disclaimer

THE CONTENT PRESENTED HERE IS INTENDED ONLY FOR PROFESSIONAL INVESTORS, E.G. BANKS, INVESTMENT ADVISORS, PENSION FUNDS, INVESTMENT FUNDS, INSURANCE COMPANIES AND SIMILAR LEGAL ENTITIES AND IS NOT INTENDED FOR PRIVATE INVESTORS. BY AGREEING TO THESE TERMS AND CONDITIONS, THE USER CONFIRMS AND ACKNOWLEDGES THAT HE IS ACTING IN HIS CAPACITY AS A PROFESSIONAL INVESTOR OR REPRESENTING A PROFESSIONAL INVESTOR AND IS NOT ACTING AS A PRIVATE INVESTOR.

© 2020 DWS Investment GmbH