Section 232 measures were announced to be announced on 7 March, Section 301 measures on 22 March. China’s retaliation was announced on 23 March. Figure 2 depicts the evolution of hog prices:

Figure 1: Pork prices (net farm value, cents per pound) (blue), 29 March futures for June (blue square) (2017M01 cents per pound) (red). Real is CPI-all deflated. Source: USDA, BLS, INO, and author’s calculations.

Hogs were a warning shot. Fuller retaliation would likely include soybeans. Would the Chinese follow through? Markets seem to ascribe some likelihood of a more serious strike.

My view: Ag country has reason to worry.

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