Why did Trump did not go ahead with the 25% tariff increase against China on March 1, like he promised? Sure made it sound like they were closing in on a deal, so a step in the right direction.

The news the last couple of days, suggest the complete opposite. There still is no deal in sight, as the same problems between the two sides is front and center.

Those two facts, that Trump suspended his 25% tariff, yet there still no negations planned for a signing of a deal, are hard to reconcile.

The most obvious explanation is that China threatened to walk away from negotiations if an extra 25% is slapped on them on March 1. Taking that 25% off the table, meant that the talks will continue. Taking that 25% does not appear to mean a deal is imminent.

Why did Trump take that off the table? If he though the threats of more tariffs would compel the Chinese to deal, then he miscalculated. This is a setback in his negotiation position, as he is not a strong as he initially thought he was.

A setback is not a collapse though. The trade numbers for China and American, well the US trade deficit is increasing, and again at an all time high with China. Ever since this trade war started, the US trade deficit increases with China.

The reason being that after the 10% tariff was slapped on Chinese goods, the PRC made a minor devaluation maybe 3% to 5% of the RMB, but then I think allowed it to come back closer to the original level. That currency manipulation allowed everyone to adjust pricing on the tariff and the currency. In the end, China retained market share with their imports into America. Hence the US trade deficit at an all time high with China and going higher.

Well, what is the point of trade war to allow the US trade deficit with China to be at an all time high? Sure, this would not have happen if China did not boycott the purchase of soybeans from the US farmer, along with the minor currency adjustment to mitigate any competition and preserve market share.

So after removing the threat of the 25% tariff last week, and with the trade numbers trending the wrong way, really wrong way for a few months now, for President Trump his trade war with China looks a little wobbly, but that is not a collapse.

How is the weather where you are?

It is cold probably, but signs of spring are coming.

China revoked an export license with Canada regarding a major export crop the canola. That probably is used as a vegetable oil in human consumption along with being animal feed.

Well, in order for Canada to export canola to China, it must have a license. Will this license be reinstated in time for the planting season? Canola is planted in Saskatchewan in late May. Incidentally, Meng Wanzhou next court appearance is May 6, where her legal team will present motions in her case, moving the legal proceedings along. When will this end, hard to say.

Suppose you are a Canadian canola farmer, and you want to continue your farming life, to plant canola and then harvest it and sell it to the Chines. Now you are screwed. Your entire operations. You got no market in China to sell it to. If there is a market for your product, the price is low. Hell, you do not know if you want to even plant for a crop.

The soybean farmer faces the same situation in Iowa. He/she has sold virtually no soybeans to China the past year.

Now with spring arriving, the soybean farmer must decide what to plant and how much to plant. Soybeans crops are planted late April or early May. It is already first week of March. They can plant corn, but that sells at a much lower price. You want to plant soybeans, but there is no trade deal, meaning no market in China for your beans.

Farming is big business. Have to buy the seeds. Have to buy the fertilizer. Have to make sure all the machinery is operating smoothly. Then farmer Joe should forward his soybeans sales on the commodity futures market which means you need margin money. You need loans. Right now you are on welfare (farming subsidies). Banks generally don't lean to people on welfare.

What the hell are you going to do now? Just wait and watch the trade negotiations? That's fine and well, but there are no new negotiations rounds scheduled.

This is bad business as far as the American soybean farmer is concerned. Their business has been sacrificed for nothing in return. Last year was like this. This year they do not know what to plant at this stage of the game. If they plant beans and the price collapses some more, they don't make money.

Would you vote for someone who screwed over your business for no reason and nothing in return? That is the case right now. This political risk to Trump extends to all farmers basically, such as who will trust the President now to defend interest of the American farmer? They have to look to someone else.

Taking the 25% tariff off the table (threats not working), seeing the US trade deficit with China at a record high a year into the trade war (tariffs not working), and the overwhelming uncertainty of American soybeans farming that is coming to a head with the arrival of spring that can lead to bad political consequences for President Trump (politics not working), suggest his trade war with China is in full collapse mode.

The only way to placate the soybean farmer is a deal. This cannot be decided later as spring is arriving. The deal must happen soon and allow enough time for the farmer to plant this year's crop. Since there are no new negotiations schedule, there does not appear to be a good ending this year for the US soybean farmer, even though they voted for Trump, and supported him in the trade war.

Like Xi Jinping said all along, no one wins in a trade war.

It's sunny today, still cold. Going out for a walk.

WH official: ‘Much’ work to be done for China deal; no in-person meetings set
03/08/2019 10:40 AM EST
https://www.politico.com/story/2019/03/08/white-house-china-deal-2830371