Impact of Chinese Retaliatory Proposed Tariffs

The announcement created an early selloff in U.S. markets amid emotional fears of an all-out trade war between China and the U.S. In early trading Wednesday morning, the Dow Jones Industrial Average fell 300+ points, soybeans dropped 50+ cents, and corn dropped 20+ cents before rallying and retracing losses. 

“Fortunately, the tariff does not go into effect immediately. There is time for both the U.S. and China to negotiate and work out the trade situation.  Emotions run high. Many times the initial reaction to bad news is worse than the actual impact realized.” -Randy Hertz, CEO Hertz Farm Management Inc.

China is the largest soybean importer in the world, importing 60 percent of world soybean exports. The United States exports 50 percent of their soybean production, which translates to 30 percent of the soybeans produced in the U.S. going to China. 

The long-term impact on land values is uncertain. The value of farmland is determined by many factors with the future benefits and perceived benefits driving current values. The United States feeds a hungry world, and farmland is used to produce the food, feed and fiber consumers demand.