A number of months ago, the President started trade wars with all the large countries that trade with the US, saying trade wars can be easily won. A number of months and the trade war is continuing, so far there are no easy winners, just losers. In an article by Mark Weinraub and P.J. Huffstutter of Reuters titled US farmers leave crops to rot. In the world of crop growing, soybeans have been a cash crop, however with the trade wars China decided to fight back. China imposed a tariff of 25% on soybeans and last year the US had a trade with China of $12 billion. China’s portion of the US crop was 60%, that has gone to close to 5% or almost shut down exports. The US government rolled out an aid program of close to $12 billion and as mid-November over $800 million has been paid out. Over the next few months expect the number to rise into the billions.

Farmers typically deliver their grains to a silo owned by grain merchants such as Archer Daniels Midland, Bunge, Cargill but the silos are full and their is no buyer for the grains, Farmers are having to pay greater storage costs. If the farmers are not paying the grain merchants, they are buying grain storage bags or the large white bags seen on farms. For their is grain surplus. Farms are hoping the trade wars end by the spring so they have space and money to plant next year’s crop.

The other solution is to plow some of the crop back into the field, this will help make the soil more productive next year which is a good thing.

Linking to dividend paying stocks, depending on what your industry is, trade wars are never easy to win and can go on for years, until the country decides either it is desperate for your goods or cooler heads prevail so the trade war ends. In the meantime, adjustments need to be made, profitability generally falls, and when you examine your investments you may wish to look at alternatives not affected by trade wars.

There are more questions than answers, till the next time – to raising questions.