Question

A tariff is added United States soybeans by the Chinese Government. What happens to the price and quantity of United States soybeans in China? Use all the steps of the Hill method.

The price of Soybeans is held below equilibrium in the United States. What happens to the price and quantity of soybeans? Use the Hill method=

Answer 1

1. Trade conflicts between the United States and China have escalated recently. The Chinese government has threatened to impose a 25% tariff on 128 U.S. products in response to a U.S. proposal to impose a 25% tariff on imported products from China.

2. soybeans is the largest agricultural export from the United States to China. Since the United States produces large amounts of soybeans (117 million metric tons (MMT) in 2016) and exports more than half that to other countries, the Chinese tariff on U.S. soybeans alone could generate major economic consequences for U.S. agriculture.

3. Joseph Hill of the Census Bureau proposed a new method. His goal was to keep the ratio of one state’s “people per Representative” to that of another as close to 1 as possible.

4. China accounted for 93.5 million tonnes, or around 70% of the world soybean import of USD 51.6 billion. Due to active domestic feed and livestock sectors, USDA estimates the import to continuously rise to surpass 100 million tonnes by 2018/19. Regardless of Chinese government’s attempt to increase domestic production, the increasing demand cannot be fully met due to the limited amount of land suitable for soybean cultivation.