Many good points.
An additional point is that for at least the short term, tariffs are wreaking havoc with spending and hiring. Case in point: John Deere. They’re getting hit from two directions. The loss of China as an end market is clobbering soybean farmers.
From the American Soybean Association:
China is the world’s largest soybean buyer, and the competition is nowhere close. Over the last five soybean marketing years, China has imported an average of 61% of the world’s traded soybean supplies, more than the rest of the world combined....
As a result, China currently has zero new crop export orders for U.S. soybeans on the books for MY 2025/26....
Soybeans are the highest dollar agricultural and food product exported from the U.S. Reducing export volumes would widen the ag trade deficit while causing economic contraction across the 30 primary soybean producing states. A trade deal with China to ensure affordable access to U.S. soybeans is more necessary and urgent than ever for farmers’ futures in coming years.
And then there’s Deere’s manufacturing issues:
Last month, John Deere said net income in its most recent quarter was down 29 percent from a year earlier. Higher tariffs, primarily on steel but also on aluminum, have cost the company $300 million so far, with nearly another $300 million expected by the end of the year. This summer the company laid off 238 employees across factories in Illinois and Iowa.
When China cut off imports from Australia, those imports instead went to other Asian countries and were then transshipped to China. The reason China buys US agricultural products is because only 15 percent of their land is usable to produce food. They can’t really, on such short notice, stop buying US food products. They will buy them through other buyers and transship them. It’s all about saving “face.”