The goods that China will/may tariff are net-sum-zero in nature. Tariff U.S oil? Fine, China will buy somebody else's supply and that somebody else will U.S oil. Same goes for most ag commodities but the hitch with ag commodities is that there's a 1-2 year lag for supplier rotation. This works through drawing down on domestic ag inventories. E.g. let's say that China has 1,000,000 bushels of soy in storage and they normally buy 1,000,000 bushels of soy per year from the U.S. China says "screw you U.S." and buys soy from Brazil instead. However they won't buy 1,000,000 bushels because there won't be that much excess supply available. China might buy 400,000 bushels from Brazil, 200,000 bushels from the U.S, and draw down their own inventories by 400,000 bushels. The next year, China outbids the Philippines or Indonesia for the soy from Brazil which forces the Philippines or Indonesia to buy their Soy from the U.S. (presumably at a lower price than the Brazilian soy) but, again, this isn't all done in a lump some, there will be a draw down in their own inventories.
After 2-3 years, the trading patterns reconfigure themselves and importing countries begin rebuilding their inventories.
The problem here in the U.S. is that it's the straw that broke the U.S. Agricultural Camel's back and that camel was well down the road heading toward the oasis of the never-ending commodity super cycle (don't worry, a bunch of people followed the U.S. down that same road). The operating environment for decades has been toward consolidation and "mega-farms" for lack of a better word. Then came the proto-monopolies of Potash, Monsanto, and John Deere. The final stake in the coffin came with the last round of land acquisitions circa 2011 where $10,000/acre became the norm for land in places like Iowa and Indiana (which is CRAZY expensive). So even though the U.S. boasts some of the best croplands and *THE* lowest transportation costs in the world, farmers managed to back themselves into a corner on cost structure right as it became apparent that demand wouldn't grow forever. China's retaliatory tariffs kind of just brought this to a head quicker than it otherwise would have.
After 2-3 years, the trading patterns reconfigure themselves and importing countries begin rebuilding their inventories.
The problem here in the U.S. is that it's the straw that broke the U.S. Agricultural Camel's back and that camel was well down the road heading toward the oasis of the never-ending commodity super cycle (don't worry, a bunch of people followed the U.S. down that same road). The operating environment for decades has been toward consolidation and "mega-farms" for lack of a better word. Then came the proto-monopolies of Potash, Monsanto, and John Deere. The final stake in the coffin came with the last round of land acquisitions circa 2011 where $10,000/acre became the norm for land in places like Iowa and Indiana (which is CRAZY expensive). So even though the U.S. boasts some of the best croplands and *THE* lowest transportation costs in the world, farmers managed to back themselves into a corner on cost structure right as it became apparent that demand wouldn't grow forever. China's retaliatory tariffs kind of just brought this to a head quicker than it otherwise would have.