Trade war with China ready to “boil”
Today's Financial News - Posted July 1, 2009
We have been preparing for this news for months, but who could have guessed it would all boil down to chicken? With China ready to ban American imports, the nation’s poultry industry could be in trouble. But this is much bigger than chicken.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): We have been preparing for an all-out trade war with China for months. One of our earliest moves has already produced gains of close to 300%.
But who would have believed it would start with chickens?
Even we could not predict poultry would be at the center of a fight ready to reach a boil.
Thanks to Washington’s most recent spending bill, the USDA is no longer allowed to accept poultry products coming from China. They feel the country does not meet American health and safety standards.
Of course China, a country that absolutely depends on exports to America, is fighting mad.
It claims America is taking “protectionary” moves and is unfairly targeting Chinese imports. It is about to fight back by banning American poultry imports.
It is bad news for America’s poultry producers, a group that is already reeling from low demand and high production costs.
One company that is getting a lot of attention from the news is Tyson Foods (NYSE:TSN). If China makes good on its words, it stands to lose a sizeable chunk of the $300 million or so the nation’s poultry industry will see vanish over the next few months.
So far this week, shares of Tyson are in positive territory. But if word of the import ban spreads and gains momentum, that could change in an instant.
Tyson and its competitors are already walking a tightrope as they try to get through the current economic firestorm. If China locks its doors, the situation will only get worse.
This is bigger than chicken
Of course, this story has a lot more to do with politics than it does poultry. China is just about fed up with America’s recent moves. Washington is weakening the dollar and is quietly increasing its protectionist stance.
We need China and China needs us… for now.
As China leads the globe out of a nasty recession, its reliance on shipping its products to the U.S. will diminish. As long as Beijing continues to find support for dumping the dollar, its anti-America momentum will continue.
As investors, now is the time to prepare for what is likely to come. There is no doubt the next year will continue to create heated debate and similar moves to the ones we are seeing this week.
Many investors are moving money toward oil as a hedge against inflation and a significant fall of the dollar. It will work, but it is certainly not the best choice. TFN Strategic Traders know exactly which commodities I am positive will create the largest profit opportunities in the next six months.
If you think the news surrounding Tyson is going to create trading opportunities, hold onto your seat. We are just getting started in what will turn out to be a generation-long struggle for power.
Next Article: TFN eNews 07/02/2009: “Did you make 43% on Tuesday’s TFN Grapevine pick?”
Be the first to leave a reply.
Your comments are welcome
Follow TFN via RSS or Twitter |
 |
 |
 |
Advertisement
Latest Headlines
- The Big Picture for Sinobiopharma, Inc. (SNBP)
- Beazer Homes USA, Inc. (BZH) and Hovnanian Enterprises, Inc. (HOV) up despite horrid housing news
- The FDA catalyst: 2010 moves in MannKind (MNKD), Roche Holding (RHHBY), Acorda Therapeutics (ACOR) show it still works!
- Steepest drop since Feb. 2009: Here we go again!
- Is the silver run over? Coeur d’Alene Mines (CDE), Silver Wheaton (SLW), Alto Group (ALTO), Hecla Mining (HL), Endeavour Silver (EXK) close down