If there is no trade in US and China , prices will rise up in China and will decrease in US as US have enough soybeans to feed it population and increasing supply of it in US will lower the prices of it which is complete loss to farmers, as they are already in loss. As Demand of soybeans in US is near to elastic, raising its supply when China is not trading with US will leads to raise quantity of soybeans as much with raising prices a little. Refer to the diagram,
As China have deficiency of soybeans in its country and imposing tariffs on US goods will make Chinese soybeans cheaper in China and people will rely on that inspite of relying of US soybeans. As supply of soybeans in China is near to perfectly inelastic, and demand at its normal, raising demand will raise prices much further than increase in quantity level. Increasing tariffs will cost China in either increase its Soybeans production to sufficient level or reduce tariffs from US so that it can be imported in cheaper rates. Refer to the diagram here, Trading in US and China of soybeans will increase the prices in US and decrease it in China and make everyone better off. US farmers will be better off that they are getting enough prices to cover their cost or to reach break even point, Chinese people are happy that they getting it in low prices. Trade policies are not even now, maybe it could stabilize in some months or so.
Stephen, MN heveUSDOT 0 Betsy Jensen stands near one of the farm trucks parked at the family farm near Stephen...
Stephen, MN heveUSDOT 0 Betsy Jensen stands near one of the farm trucks parked at the family farm near Stephen, Minn., on Monday. Dan Gunderson | MPR News Now that spring has finally arrived in Minnesota, the Jensen family is scrambling to get crops planted on their northern Red River Valley farm. But the usual optimism of a spring planting season is tempered this year by worries about the ongoing trade dispute between the United States and China. China has...