STREAMING NOW: Watch Now

Trump's trade war with Rwanda over used clothes

Second-hand clothes have sparked a bitter trade dispute between the United States and Rwanda, one of the world's poorest countries.

Posted: Jul 13, 2018 4:14 AM
Updated: Jul 13, 2018 4:45 AM

Wall Street might not be freaking out about the trade war between China and the United States, but serious cracks are forming in the commodities market.

Check out copper, the industrial metal that's so sensitive to swings in the global economy that it's affectionately known as Dr. Copper. The price has plunged 16% over the past month and hit a one-year low on Wednesday.

Iron ore, another critical metal, has dropped 11% this year. Zinc hasn't been this cheap since mid-2017. And a Bloomberg index of industrial metals including aluminum and nickel closed on Wednesday at the lowest since August 2017.

"Copper and other metals are reflecting concerns about a global slowdown — created by tariffs," said Kristina Hooper, global market strategist at Invesco. "We are in a trade war that is being fought on multiple fronts."

And then there are soybeans. China, the world's largest consumer of American soybeans, imposed a 25% retaliatory tariff on the crop last week.

The trade brawl has already dealt a huge blow to American farmers. Soybean prices have crashed 13% this year to the lowest since December 2008, during the Great Recession.

"If you lose your biggest customer, what do you think is going to happen to prices?" asked Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Related: Trade war fallout: Soybean prices plunge to a 10-year low

Contrast the commodities crash with what's going on in the stock market.

The S&P 500 has jumped more than 2% this month, and the highflying Nasdaq has soared 4% to a record high on Thursday. The advances reflect optimism that the trade fight between the world's two largest economies will be resolved before November's midterm elections in the United States.

The percentage of individual stock market investors who are bullish soared this week to 43.1%, according to the AAII Investor Sentiment Survey. Bespoke Investment Group said it was the biggest one-week jump in sentiment since President Donald Trump's election in November 2016.

Trump has expressed confidence he will eventually reach a trade deal with China — even though high-level talks have ground to a halt.

"I will open things up, better than ever before, but it can't go too quickly," Trump tweeted on Wednesday.

Still, the recent plunge in commodities suggests growing nervousness about the economic fallout of the tit-for-tat tariffs launched by Washington and Beijing.

It's unusual to see the price of raw materials drop so sharply during a time of broad economic health around the world. US economic growth for the second quarter could clock in at a very brisk 4% pace.

Related: Trade brawl threatens America's booming oil exports

Yet copper, which is viewed as a bet on the direction of the global and Chinese economies, is down 15% this year. Virtually all that decline has come since early June as trade tensions have escalated.

China is an avid consumer of copper, which is used for plumbing, wiring, heating and various other purposes. China gobbles up about 40% of the world's supply, according to Ed Yardeni, president of investment advisory Yardeni Research.

Dr. Copper is flashing "Code Red" about China, Yardeni told clients in a report earlier this week. He said the recent plunge has "raised the odds of a recession."

The trade standoff comes at a difficult time for China. The world's No. 2 economy had already been slowing, hurt by efforts from the government to cut pollution and a chronic addiction to debt. Now China has to grapple with a trade war.

"There is legitimate worry about the impact to the Chinese economy from these tariffs," Boockvar said.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 25208

Reported Deaths: 1060
CountyConfirmedDeaths
Hennepin8514616
Ramsey3075128
Stearns203013
Nobles15445
Anoka142970
Dakota134957
Washington64532
Olmsted63410
Kandiyohi4971
Rice4622
Scott4362
Clay42728
Mower3452
Wright3202
Todd3190
Sherburne2462
Carver2182
Benton1783
Steele1600
Blue Earth1420
Martin1325
Freeborn1250
St. Louis11814
Pine890
Unassigned8810
Nicollet8810
Winona8015
Cottonwood760
Watonwan750
Carlton750
Crow Wing712
Otter Tail700
Goodhue683
Chisago621
Polk612
Lyon570
Itasca5510
Dodge530
Chippewa511
Morrison470
Meeker450
Douglas440
Le Sueur441
Becker400
Murray390
Jackson390
McLeod370
Isanti350
Waseca260
Rock220
Swift190
Mille Lacs191
Pennington190
Faribault190
Wabasha180
Fillmore171
Sibley160
Brown162
Beltrami150
Cass142
Norman130
Marshall120
Pipestone120
Kanabec111
Wilkin113
Wadena100
Koochiching90
Pope90
Aitkin80
Mahnomen61
Yellow Medicine60
Big Stone60
Lincoln50
Redwood50
Renville50
Red Lake40
Grant40
Lac qui Parle30
Clearwater30
Traverse30
Houston20
Hubbard20
Roseau20
Lake10
Kittson10
Stevens10

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 19669

Reported Deaths: 555
CountyConfirmedDeaths
Polk4236133
Woodbury276136
Black Hawk174745
Linn95379
Dallas91623
Marshall89616
Buena Vista8100
Johnson6149
Wapello59712
Muscatine55741
Crawford5282
Tama40327
Scott36110
Dubuque34619
Louisa34511
Sioux2830
Pottawattamie2698
Jasper26017
Washington1898
Wright1780
Warren1350
Plymouth1332
Allamakee1204
Story1161
Mahaska9510
Poweshiek908
Henry711
Bremer696
Des Moines651
Boone650
Clinton641
Taylor560
Clarke560
Guthrie513
Cedar481
Benton431
Hamilton430
Webster421
Monroe385
Shelby370
Jones360
Clayton343
Osceola340
Buchanan330
Iowa330
Marion320
Cherokee310
Jefferson300
Cerro Gordo291
Madison292
Lee270
Fayette270
Monona250
Winneshiek240
Lyon240
Davis230
Harrison230
Dickinson210
Sac200
Grundy200
Mills190
Floyd191
Humboldt181
Clay170
Delaware171
Hardin170
Butler171
Lucas170
Emmet160
Hancock160
Appanoose143
Ida140
Page140
Franklin140
Keokuk140
Pocahontas130
Greene130
Howard120
Cass120
Audubon121
Jackson120
Carroll110
Winnebago110
Chickasaw100
Kossuth100
Adair90
Van Buren90
Union90
Montgomery80
Adams70
Palo Alto70
Fremont40
Ringgold40
Mitchell40
Worth30
Calhoun20
Wayne10
Decatur10
Unassigned10
Rochester
Clear
70° wxIcon
Hi: 91° Lo: 62°
Feels Like: 70°
Mason City
Clear
71° wxIcon
Hi: 95° Lo: 64°
Feels Like: 71°
Albert Lea
Clear
72° wxIcon
Hi: 93° Lo: 62°
Feels Like: 72°
Austin
Clear
72° wxIcon
Hi: 95° Lo: 64°
Feels Like: 72°
Charles City
Broken Clouds
70° wxIcon
Hi: 93° Lo: 64°
Feels Like: 70°
Powerful storms and summer-like conditions are coming our way
KIMT Radar
KIMT Eye in the sky

Latest Video

${item.thumbnail.title}

StormTeam 3: Today's Severe Weather Update

Image

Yoga studio closes space, tries new idea

Image

Forager Brewery welcomes new business

Image

Salons reopen at 25% capacity

Image

DMC's impact on Rochester's economic recovery

Image

Forager Brewery - best patio in Rochester

Image

Protests in Mason City

Image

Barbershop town hall discusses racial profiling

Image

Minnesota salons reopen

Image

Barbershop Talk: Town hall

Community Events