The u.s. produces a surplus of staples, especially corn and soybeans that are exported mostly to China. If China does retaliatory tarriffs won't that lower demand for those staples and thus the price in the US? And theoretically couldn't that also reduce the price of downstream animal products since feeding them will be cheaper?
This assumes:
- Food companies don't use the excuse of tarriffs to raise prices even when there costs go down
- The government doesn't step in to back stop corn demand and buy tonnes of it to keep prices high. I know they did this with dairy in the 70s and 80s, not sure if they still do it.
No way. They would rather burn it to drive up prices by increasing scarcity than set the precedent of lowering prices.