On March 2, 2018, President Trump said, “trade wars are good, and easy to win.” On the same day in my weekly column entitled “Trump Tariffs” I quoted Robert Shiller, Nobel Prize winner in Economics in 2013. Mr. Shiller said, “I’d wonder if this isn’t just a first step, that Trump has in mind raising other tariffs. Even if he doesn’t there will be other countries who will retaliate and they’ll get bigger. This is really like a first shot in a war and that’s what is worrisome. That’s what happened in the Great Depression.”

Yours truly stated in the same column above, the following: “Several thoughts ran through my mind when I heard of the Trump tariffs. The first was,’oh, oh! Someone does not know their history!’ The second thought was China and the simple fact it purchases more than 50% of all soybeans exported from the U.S. It is doubtful that China will respond in kind by canceling U.S. soybeans. But you never know about such things when emotions begin to run high.”

In the final week of July that just ended and in the opening days of August that just began, the trade war between the U.S. and China intensified dramatically. From Bloomberg News earlier this week with a headline blaring, “It Was the Week Trade Wars Went from Uncomfortable to Scary” comes the opening sentence: “It’s been a week of trade pain that changes a lot about the global economic outlook.” Below are some examples of the pain that was experienced for a wide variety of markets due to the trade war and tit-for-tat retaliation that is only getting worse.

The Dow Jones just experienced its worst week in 2019 and the S&P fell 3.1%. The Dow from the July 15 high to the early August low fell more than 2,300 points. Shares of Fluor Corporation, a global engineering and construction firm, plummeted to a 15 year low. And 10-year Treasury yield recorded their biggest weekly drop since 2012 amid tariff tensions.

Corn prices also peaked on July 15, along with the Dow. Corn prices into early August fell $.67 a bushel.

Hog futures fell more than $20 for the worst decline in history in such a short period amid the fifth highest trading volume ever seen. Crude oil experienced its worst one-day decline in four years. Cotton prices that I consider a leading indicator for grain prices, per se, hit a two-year low. Copper prices, a leading indicator for the economy as well as the stock market, also hit a two-year low.

All the examples above regarding trade war pain took place in the final week of July and opening days of August. Mr. Trump got the snowball going with a tweet on a Monday which was bad enough but on Thursday, he added fuel to the fire by threatening to place another 10% tariff on $300 billion in Chinese goods coming into the U.S. That was in the final week of July.

Over the weekend and into early August, China retaliated by directing all state buyers “to stop buying all US ag-products.” China also managed to devalue its currency to the equivalent of our tariffs, a maneuver that supposedly infuriated President Trump. Satoru Yoshida, a commodities analyst at Rakuten Securities Inc. in Tokyo, said, “The trade war is worsening step by step with tit-for-tat tariffs, sanctions on companies and currency devaluation. It’s hard to imagine the situation will improve anytime soon.”

Well, it got worse because the U.S. Treasury Department just labeled China a, “currency manipulator” which simply added fuel to the trade war. And the pledge by China to stop buying all U.S. ag-products was a bearish statement sending tremors of fear reverberating through the hearts and minds of American farmers and ranchers.

A year ago, yours truly was touting the benefits of a trade deal with China. I stated several times, as did others, that a trade deal would translate to $50 billion in new demand for U.S. ag-products. But now, in face of tit-for-tat trade war retaliation, some estimate new demand will be lucky to hit $4 billion, a 15-year low.

The U.S. ag markets and ag producers are taking a disastrous body blow due to the trade war. Regardless of what Mr. Trump believes, there is nothing fun about a trade war and there are no winners. History shows that clearly China needs American ag products and American ag producers need China as a reliable customer. Mr. Trump needs to get a trade deal done because things are no longer just uncomfortable. They are now scary.

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