Brazil is pretty pleased with the Trump Presidency

in #bust6 years ago (edited)

Ever snce China put tariffs on American soybeans, Brazil has been extremely cheerful. They're selling their soy to the Chinese at a 20% premium over the price they normally sell at.

According to Forbes:

The biggest problem for American soy producers is not the tariff. It’s soybean oversupply.

Soy futures are expected to fall a little further if the U.S. harvest this fall is as good as the market forecasts. Soy prices are around $8.38 a bushel in the U.S. and over $10.50 per bushel in Brazil. China effectively gave itself a global soybean tariff.

And if Brazil runs out of soy to sell to the Chinese? They have a cunning plan - to import soy from the Americans and resell it to the Chinese.

There is an art to picking tariffs: choose something where there is a plentiful substitute. The Chinese have messed up here because there are only two big producers of surplus soy in the world - the USA and Brazil. And the Brazilians can't easily increase the amount they produce.

So why did the Chinese opt to put a tariff on an item they need so badly and can't really get from elsewhere? Because they were trying to influence the American mid-terms and felt that if they put pressure on Trump's base, he'd call off his trade war.

Everyone it seems, wants to try to influence American elections one way or another. The Chinese should have learnt from what happened to Russia: Putin thought he was getting an ally, but instead he got someone who has been forced by both Congress and the press to be harder on Russia than previous presidents when it comes to sanctions, in order to prove he is independent of foreign influence.

That's the trouble with coming from an authoritarian state like China or Russia. It's really hard for them to fathom the unexpected chaotic dynamics of democracies. In the end, the only ones who control democracies are the voters.

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