How higher tariffs affect different industries [Wall Street Journal]
The increased tariffs enacted by the U.S. on products coming from China raise the costs for many American companies and threaten their future profits. On Friday, the U.S. raised import tariffs to 25% on $200 billion of Chinese goods, such as circuit boards, microprocessors, vehicle parts and machinery. President Trump also has warned about imposing 25% tariffs on $325 billion in Chinese goods that aren’t currently taxed. Such a move would cover virtually all Chinese exports to the U.S. and spread the pain to consumers. Consumers haven’t felt the brunt of the U.S.-China trade fight since the tariffs so far have largely targeted components used by manufacturers or because businesses absorbed some of the initial 10% tariffs.
Trump’s trade war is wrecking America’s farm economy [Los Angeles Times]
Farm prices are down, bankruptcies are up, farm equipment is getting more expensive and export markets are fading away: Is there anything to like about the impact President Trump has had on the agricultural economy of the United States? It’s no secret that the nation’s agricultural midsection has been a haven of support for Trump. But it also has been pummeled by his policies, not least among them his truculent trade war with some of the farm belt’s most important export markets, such as China. Last November, Chinese soybean imports from the U.S. fell to zero. That’s a big hit, since American soybean farmers export half their crop and China was their largest single market, buying $12 billion of the commodity in 2017. China instead has been buying from Brazil, raising fears that a long-term shift in its import sourcing could leave U.S. producers permanently out in the cold. The result is that soybean prices have plunged, with futures falling below $8.13 a bushel, their lowest price in a decade.
U.S. stocks fall on renewed trade anxiety [Wall Street Journal]
U.S. stocks slid Monday, extending a turbulent streak of trading, after officials in Beijing and the White House exchanged fresh threats in a trade fight that many fear could crimp growth. The Dow Jones Industrial Average fell 639 points, or 2.5%, to 25302, heading for its biggest one-day loss since January. The S&P 500 dropped 2.5% and the Nasdaq Composite declined 3.2%. Major indexes have made a sharp retreat from records as trade tensions between the world’s two biggest economies have ratcheted higher. Chinese officials said Monday that they would raise tariffs on roughly $60 billion worth of U.S. imports, following through on threats last week to hit back at the U.S. after its own increase in tariffs went into effect. The moves showed investors that one of the biggest assumptions many had held this year could be in danger of falling apart. Many money managers had credited the stock market’s 2019 rally to a combination of easy monetary policy, steady growth in the U.S. and signs of progress in trade negotiations.
Europe sticks a knife into vegan meat [Wall Street Journal]
The European Union is trying to put vegetables back in their box. The trading bloc’s agriculture committee wants to ban vegan food products from using terms such as burger and sausage on their labels. The logic is that consumers expect their burgers to be made of pork or beef and will be duped by plant-based pretenders. More likely the region’s livestock industry smells danger. Meat-alternative products made by companies like Beyond Meat BYND +4.06% and Impossible Burger appeal to a growing number of consumers that want to cut down on meat. A high-profile report from the EAT-Lancet Commission warned that red-meat consumption needs to halve by 2050 to avoid serious health and environmental problems. Whether or not consumers are fooled, vegan brands have found success in giving a meaty flavor to their marketing.
California had a wet winter. But a satellite photo shows the state is drying out fast [San Diego Tribune]
…Reservoir conditions are good throughout virtually all of California. In April, the snow level in the Sierra was 162 percent of average. The reservoirs will be well stocked for a long period of time. But we’ll have to monitor temperature and wind conditions between now and late fall. If they’re abnormally high, it could mean that wild land areas will dry out very quickly, creating dangerous wildfire conditions — even though the state’s main reservoirs will still be well stocked.