Airbus officially opened its third Final Assembly Line in Mobile on Monday, cementing the Alabama city’s status as the world’s fourth largest aircraft manufacturing hub behind Seattle, Toulouse, and Hamburg…
The expansion doubles Mobile’s potential A320 output to 16 planes per month and brings total production capacity at the campus to about 20 aircraft per month, including four A220-series jets.
DB2
Do they need any soybeans?
Worst case, are they hiring soybean farmers?
That would save a government bailout to farmers and help keep gov spending down so everyone can keep their Medicare and Social Security (“we paid into it!”).
China stopped purchasing American soybeans in the spring, in retaliation to the … tariffs. The move appeared to be a means for China as it looked to gain leverage in trade talks by shifting its purchases away from U.S. producers to countries like Brazil and Argentina.
“We’ll see the bottom drop out if we don’t get a deal with China soon,” said Ron Kindred, who farms 1,700 acres of corn and soybeans in central Illinois. “There doesn’t seem to be any urgency on China’s side, and more urgency coming from the farm community in the U.S.”
…expected to meet later this week … to make a final determination of where the money for a farmer bailout should come from, according to a White House official. The president and his team are considering the use of tariff revenue to fund much of the aid.
Doubtful, although I suppose they might buy some biofuel to deliver the planes.
DB2
Can someone explain this to me?
So China quits buying soybeans from us and goes to Brazil and Argentina. Who bought Brazil’s and Argentina’s beans before the Chinese? Aren’t Brazil’s and Argentina’s customers still in need of beans? Will Brazil and Argentina be able to supply enough beans to everybody?
There’s an x amount of demand and an x amount of supply for beans. One country may prefer to buy from a specific country to retaliate against a 3rd country’s trade policies, but I don’t see how that changes the world supply/demand for beans.
Brazil and Argentina upped production. Don’t know any details or sources.
That’s correct: there is no change unless there are shortages or increased demand. The allocations just go to different places, but this is where the issues arise. There is a dislocation in the trade arrangements that take time and logistics to work out (in addition to new contract prices). So much, if not most, of the soybeans that Brazil and Argentina were sending to the EU and SE Asia are now going to China, which means that the US now can supply the EU and SE Asia. There is a global rebalancing that affects prices, timing, and shipment. Very disruptive on an international scale.
Pete
Under a simple model of supply, demand and elastic prices, if a portion of the market is subject to a tax (China tariff, US soybeans for China buyers), the overall net effect should be lower demand and lower producer prices for US soybeans.
US producers now operate with the tariff price burden on a large part of their demand. US now has excess supply relative to pre-tariff prices, putting downward pressure on US prices.
China demand shifts to rest of the world, putting upward pressure on non-US prices, but the more non-US suppliers increase supply in response, the more US suppliers face downward price pressure globally.
Shifting supply chains is not frictionless and incurs a cost, again putting downward pressure on US and non-US prices. (Will the billions in bailout $ provided to Argentina from US help alleviate Argentina’s supply chain costs?)
I guess that’s why they say there will be winners and losers and our government is helping to pick the economic winners and losers because US exporters are direct retaliatory targets in a trade war.
But anyway, it’s all part of our winning strategy.
At least soybeans are cheap now for US buyers.