Authored by Mike Shedlock via MishTalk,
Trump claims to have worked out a soybean deal with the EU. It was a lie. Let’s now look at kidney beans.
Trump’s tariff battle is shaking Wisconsin’s Chippewa Valley Bean Co., and rippling through to its clients, vendors and customers. The result: Kidney Beans Piled to the Rafters.
MENOMONIE, Wis.—After the U.S. slapped tariffs on European steel and aluminum in June, Europe hit back with a tax that, among other things, made American kidney beans 25% more expensive in Europe.
Now, Cindy Brown is running out of room to store kidney beans. One-ton bags of them cover the floors in her cavernous warehouses. Smaller sacks are piled on wood-pallet shelves. Beans fill tall steel bins that dot the grounds. Chippewa Valley Bean Co. had been on track to ship to Europe 60% of its beans traded internationally this year, worth $25 million. Now, “we’re just sitting on our hands,” said Ms. Brown, president of the family company.
Ms. Brown, Chippewa Valley’s president, said the company last month shipped nearly 40% less than what is typical for this time of year. She said 80 shipping containers’ worth of kidney beans, valued at a total of $2 million, are stuck in its warehouses as orders from Europe dry up.
Chippewa Valley handles one in four dark red kidney beans traded internationally, according to Randy Fairman, an agricultural consultant who specializes in dry beans. “If the tariffs hold, the near-term impact will be devastating to small businesses both in the U.S. and the EU,” Mr. Fairman said. “There is no place in the supply chain where a 25% tariff could be absorbed.”
Mercy Me, a Kidney Bean Glut
What is a Glut?
Is there a “steel glut”?
Are people paying to get rid of steel? If not, where is evidence of a glut?China produces more steel than it can use. Is that the basis?
If so, is there a soybean glut because the US produces more than it consumes?— Mike Mish Shedlock (@MishGEA) August 1, 2018
About that Bean Order
European Union representatives told me that they would start buying soybeans from our great farmers immediately. Also, they will be buying vast amounts of LNG!
— Donald J. Trump (@realDonaldTrump) July 26, 2018
Lighthizer: Regarding Trump’s meeting with Juncker: “Our view is that we are negotiating about agriculture, period,” U.S. Trade Representative Robert Lighthizer told a Senate committee.
Juncker: The U.S. “heavily insisted to insert the whole field of agricultural products. We refused that because I don’t have a mandate and that’s a very sensitive issue in Europe,” Mr. Juncker told reporters right after the meeting.
Lies
There was no deal to do anything but stop the escalation of more tariffs. For discussion, please see Trump’s Lies Won’t Make Farmers Great Again: There Was No Deal on Agriculture.
Meanwhile, a glut of beans, all kinds, is stacking up.
Growing List of Companies Complaining
It’s safe to add the Chippewa Bean Company to the Growing List of Companies and Organizations Complaining About Tariffs
Political Backlash
Things are so bad, five Republican Senators openly complain about Trump’s policies. House Rep Mark Sanford called it “nightmare policy”. For discussion, please see Republican “Nightmare”.
My assessment that a Tariff Backlash Could Cost Republicans the Senate stands. For that to happen, the economy needs to slow and tariff madness continue, but both are possible if not likely.
Republicans losing the House over this is arguably more likely.
Overall Trade Assessment
US Trade Policy: Not Only are We Stupid, We are Hypocrites.
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