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 A ship laden with U.S. soybeans that was steaming toward northern China looks to have lost its race to arrive before import duties are imposed. 
 
 Retaliatory tariffs on U.S. goods have now taken effect after the U.S. implemented a raft of duties earlier in the day, China’s foreign ministry said at a press conference in Beijing on Friday afternoon. The Chinese government had previously said it will impose a 25 percent levy on shipments on soybeans among other U.S. agricultural produce and goods including automobiles. 
 
 The bulk carrier Peak Pegasus, which had been accelerating earlier in the day as it raced to the port of Dalian, was about 25 miles away from its destination as of 4:25 p.m. local time and slowing down, according to ship-tracking data. It’s scheduled to arrive at about 5 p.m., the data show. 
 
 Peak Pegasus is still heading toward Dalian as China announces its tariffs are now in effect. 
 
 Click to track the path of the Pegasus. 
 
 The U.S. fired the first shot in the deepening trade war, imposing tariffs on $34 billion of Chinese imports from 12:01 a.m. Friday in Washington, just after midday in China. Soybeans have been a key battleground in escalating trade tensions between the two countries as China is the world’s biggest importer and America’s largest customer in trade worth $14 billion last year. 
 
 The Asian country is expected to cancel or re-sell U.S. soybeans due to the additional duties and purchased 19 cargoes from Brazil last week. China typically imports from Brazil at this time of year before switching to the U.S., spurring concerns about a deficit in the fourth quarter. 
 
 — With assistance by Shuping Niu ||||| Peak Pegasus became unlikely hit on Chinese social media as it tried to beat tariff deadline 
 
 Giant shipload of soya beans circles off China, victim of trade war with US 
 
 A shipment of soya beans worth more than $20m (£15.5m) has been bobbing aimlessly in the Pacific Ocean for a month, a casualty of the escalating trade war between China and the US. 
 
 Lingering uncertainty over the cargo’s fate offered a timely reminder of the fallout from a dispute that intensified on Wednesday, as the US president, Donald Trump, unveiled a second round of tariffs on $16bn of Chinese goods, prompting Beijing to respond in kind. 
 
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 The Peak Pegasus, a 229 metre bulk carrier weighing 43,000 tonnes, has become the reluctant symbol of the potential consequences of this tit-for-tat trade spat. 
 
 The ship, owned by JP Morgan Asset Management, was scheduled to unload about 70,000 tonnes of American soya beans in the Chinese port of Dalian on 6 July, shortly after Trump imposed a first round of tariffs on $34bn-worth of goods. 
 
 As it rushed to shore in the hope of clearing customs before Beijing imposed retaliatory tariffs, the ship – and its protein-rich cargo – became an unlikely internet sensation on the Chinese social media platform Weibo. 
 
 However, the vessel arrived just too late and has been sailing around in circles ever since while the cargo’s owners, understood to be the agricultural commodity trading house Louis Dreyfus, decide what to do. 
 
 The Amsterdam-based company is thought to be paying about $12,500 a day to continue chartering the ship, which is idling in the Yellow Sea off the coast of China, indicating extra costs so far of more than $400,000. 
 
 Facebook Twitter Pinterest The Peak Pegasus cargo ship has been sailing in circles since it arrived, as shown on this Thomson Reuters tracking plot. Photograph: Thomson Reuters 
 
 Commodities experts said it could still make financial sense to keep the beans at sea, potentially for months, given the risk of making the wrong decision about what do next. 
 
 The market price of US soya beans has slumped since the trade war began as firms from China, the world’s largest importer, sought alternative sources. 
 
 That means potential alternative buyers for Louis Dreyfus’s soya beans in Europe or elsewhere would probably demand a discount on what they would have sold for originally. 
 
 Offloading them in China would incur a 25% tariff, adding around $6m to the cost of bringing them into the country. 
 
 “They [the cargo’s owners] have clearly got in mind the 25% tariff to take the goods into China and they’ll be weighing that against alternative buyers asking for a massive discount potentially equivalent to that,” said Michael Magdovitz, an analyst at Rabobank. 
 
 “They’d also have to pay an exorbitant price to divert the vessel from China to another destination.” 
 
 Soya beans are crucial for the production of cooking oil, biodiesel and meal used to feed livestock, including pigs reared to satisfy China’s appetite for pork. 
 
 One factor complicating the fate of the soya beans is uncertainty about the length of time that China can realistically switch to Brazilian soya beans as an alternative. 
 
 “The problem for the Chinese is that Brazil quickly runs out of soybeans around this time of year,” said Magdovitz. “It can’t be the only source for China.” 
 
 China accelerated imports before the tariffs came into force in order to build stocks and hold off paying the tax. 
 
 Magdovitz said the Peak Pegasus – and another soya bean-laden ship called the Star Jennifer that has also been idling offshore for a fortnight – could be waiting in the hope that China decides to subsidise soya bean importers. 
 
 That could render US imports affordable again, allowing the resumption of a soya bean trade worth $12.7bn a year. 
 
 Beijing blamed Trump for the escalation in the trade war as it announced 25% tariffs on another 333 separate US products from 23 August. 
 
 “This is a very unreasonable practice,” China’s commerce ministry said in response to Washington’s decision to target the additional $16bn of imports. 
 
 China said it would retaliate with 25% tariffs of its own on an equivalent amount of American imports, including steel, fuel, cars and medical products. 
 
 China and the US imposed tariffs on $34bn of each other’s goods in June and the latest move underlined Beijing’s determination to match protectionist measures like for like. 
 
 Shares on Wall Street opened slightly lower as fears that Trump will now make good on his threat to target a further $200bn of Chinese goods dented investor confidence. 
 
 The ratings agency S&P has expressed concerns that the trade war could spill over into services because China is running out of American goods to hit with tariffs. 
 
 The first Chinese trade figures since the imposition of the first round of US tariffs in early July showed that the country’s annual export growth edged up from 11.2% to 12.2% last month when measured in dollar terms. 
 
 The Guardian has approached Louis Dreyfus for comment. JP Morgan declined to comment. ||||| “We’ve spent decades trying to work ourselves away from government assistance,” said Brian Duncan, who raises hogs and cattle, grows row crops and is vice president of his state’s Farm Bureau. “Part of that has been the development of foreign markets.” | AP Photo Farmers to Trump: No trade war, please ‘What [Trump] did last night was outlandish. Enough is enough. Let’s sit down and talk. Let’s not threaten any more’ 
 
 President Donald Trump has promised to shield farmers from the sting of China’s trade retaliation, but that embattled portion of Trump’s rural base says they just want to sell on the open market, without tariffs slapped on their products amid escalating tensions. 
 
 In interviews with POLITICO this week, several farmers across the country said they don’t want a trade war and they want to avoid having their income tied to government support to make up for losses created by one. 
 
 Story Continued Below 
 
 “We want our living to come from the marketplace,” said Mark Recker, a corn and soybean farmer in northeast Iowa. 
 
 But the threat of a trade war now looms as declining farm incomes have already forced farmers to delay major equipment purchases, diversify into other activities like livestock or even take second jobs. 
 
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 China has threatened to impose duties on the $14 billion worth of soybeans it imports from the U.S. every year and a host of other farm goods as well as airplanes, chemicals and other U.S. goods in response to Trump’s recent trade actions. The most recent was the March 22 announcement to consider a 25 percent tariff on $50 billion worth of Chinese goods to punish China for its intellectual property practices. 
 
 Trump upped the ante on Thursday in response to China’s countermeasure by asking administration officials to identify a further $100 billion in Chinese imports to put on the firing line. 
 
 Knowing that China — the second-biggest market for U.S. agricultural exports — will likely respond by continuing its assault on Trump’s rural base, the president, in a statement, said the administration “will use all of our authorities to ensure that we protect and preserve our agricultural interests.” 
 
 Support payments may remove some short-term pain, but farmers say the real damage would come in the long term. 
 
 “When we become a supplier that’s not reliable, countries look elsewhere,” said Recker, who currently serves as president of the Iowa Corn Growers Association. “This will embolden South America — Argentina and Brazil — to expand their acres and just make them even more of a competitor.” 
 
 Brian Duncan, who raises hogs and cattle and grows row crops in Ogle County, Illinois, and is vice president of the state’s Farm Bureau, told POLITICO that while he appreciates the president acknowledging that agricultural producers are going to take a hit, he is skeptical of the assistance being promised. 
 
 “We’ve spent decades trying to work ourselves away from government assistance,” Duncan said. “Part of that has been the development of foreign markets.” 
 
 He echoed Recker’s concerns about losing markets that the U.S. has spent years developing due to all the trade uncertainty, saying that the effects of a tit-for-tat dispute could ripple across generations. 
 
 Former USDA chief economist Joseph Glauber said the whole idea of paying off farmers to compensate for a trade action creates a “moral hazard.” 
 
 “To sort of buy them off, it almost gives free rein to pursue other trade wars, and I think that’s a real mistake,” said Glauber, now a senior research fellow at the International Food Policy Research Institute. 
 
 Pumping more financial support toward farmers could also fuel even more trade skirmishes as other countries challenge U.S measures at the World Trade Organization, he said. 
 
 The Agriculture Department last paid out ad hoc subsidies in the billions in the late 1990s and early 2000s. That resulted in a yearslong dispute with Brazil over U.S. cotton subsidies that ended with a major legal defeat for Washington and hundreds of millions in payments, Glauber noted. 
 
 While offering help to farmers, the Trump administration has revealed few details on what form it might take. A little-known agency called the Commodity Credit Corporation is a likely source of funding for the Trump administration’s farm sector rescue mission. 
 
 The Agriculture secretary has broad authority to support the farm sector using the CCC, which was created in the 1930s for the sole purpose of stabilizing and protecting crop prices and farm income. The financial institution has $100 million on hand that it borrows from Treasury, but can borrow up to $30 billion at any one time. 
 
 USDA, which already uses the CCC to fund farm subsidies and loans, resource conservation and emergency disaster programs, can essentially carry out any assistance using the CCC as long as it supports agriculture. 
 
 Congress in recent years has restricted this authority after appropriators raised concerns about USDA issuing nearly $350 million payments to certain industries in 2009. But that changed this year, when lawmakers lifted those restrictions in the most recent budget-busting $1.3 trillion omnibus spending deal — which Trump threatened to veto before declaring he’d never sign another one like it. 
 
 Agriculture Secretary Sonny Perdue, during a tour through Ohio this week, has been reassuring farmers and ranchers that the Trump administration won’t leave them to bear the brunt of retaliation alone. In a statement to POLITICO on Thursday, Perdue said he “stands ready to defend agricultural producers who may be harmed” and he will use all his authorities to protect their interests. 
 
 While on the road, Perdue said Congress may have to take some “extraordinary measures” in the farm bill based on what happens in the trade dispute with China. The USDA has not shared details about what the secretary is considering. 
 
 Lawmakers are trying to pass a farm bill before a Sept. 30 deadline, though in the House a partisan fight over proposed changes to the food stamp program — which accounts for 80 percent of cost of the legislation — has upended what once expected to be a bipartisan process and cast uncertainty over whether it can attract enough votes. 
 
 Sen. Jerry Moran (R-Kan.) told Reuters on Friday during a commodities conference that he assumed the Trump administration would try to use the farm bill to help farmers withstand market slumps, though no specific proposals have been suggested yet. 
 
 The farm bill doles out from $5 billion to $7 billion a year in commodity payments in response to price and revenue drops, while also subsidizing about 62 percent of farmers’ crop insurance premiums. Congress also recently approved $3 billion in ad hoc disaster assistance to help producers recover from hurricanes and wildfires last year, which the USDA is expected to begin sending out this summer. 
 
 Duncan, the farmer from Illinois, pointed out that lawmakers are having a tough time as it is writing a farm bill because they can’t spend any additional money beyond what current law is projected to cost over a decade. So sending out potentially billions of dollars to producers could be a tough sell. 
 
 Sen. Joni Ernst (R-Iowa) said Trump “gets the importance of agriculture." 
 
 “When we actually sat down with him and talked about these issues, it was like a light bulb came on when he saw our market was dipping,” she told reporters in Iowa this week, recounting a White House meeting she and other senators had with Trump in December. 
 
 “I laid out a graph that showed every time he talked about tearing NAFTA up what it did to our hog markets and that he got and he was like, whoa. So he understands that,” she said. 
 
 But even as Trump recognizes the need for supporting U.S. farmers, the government does not “have enough money” to compensate every company that would be hurt in a trade war with China, said Rick Helfenbein, president and CEO of the American Apparel & Footwear Association. 
 
 “It’s not something that can be subsidized. In the short term you might handle the farmers, but should everybody else get in line with their hands out and we can become the welfare state of exporters? It’s an almost childish idea that we’re going to pay the farmers to be quiet,” Helfenbein said. 
 
 China currently supplies more than 40 percent of all apparel imports into the United States. So AAFA member concerns are not being hit with new Chinese tariffs, but whether Chinese clothing and footwear appear on future U.S. retaliation lists. The apparel import sector breathed a big sigh of relief when it was left off Trump’s initial list, but fears it won’t be so lucky if USTR has to come up with $100 billion more product. 
 
 “What [Trump] did last night was outlandish,” Helfenbein said. “Enough is enough. Let’s sit down and talk. Let’s not threaten any more.” 
 
 The U.S. chemical industry is also caught in the crossfire of the escalating trade dispute. Nearly 40 percent of the $50 billion worth of products on China’s initial retaliation list are chemicals, threatening an important sector of the U.S. economy that currently runs about a $32 billion trade surplus with the rest of the world. 
 
 Like farming, the U.S. has developed a competitive advantage with its chemicals industry over the past 10 years as the shale gas revolution has turned it from a high-cost producer to a low-cost producer, which appears to have caught Beijing’s attention. 
 
 “I think China is also seeing that we have this global competitive advantage and we’ve become a target,” said Cal Dooley, a former member of Congress who now heads the American Chemistry Council. 
 
 He said it’s frustrating that Trump is imposing tariffs to support less competitive sectors like steel and aluminum, while exposing more competitive sectors like agriculture and chemicals to China’s retaliation. 
 
 “It’s absolutely not a realistic policy that the administration has the ability to make farmers whole or to make the chemical industry whole,” Dooley said. “The bottom line is the U.S. chemical industry is not looking to the government to provide a handout or support. We are fully capable of being made whole by being competitive in the global market place.”
– Trade disputes generally don't lend themselves to exciting visuals, but the new one between the US and China might be an exception. As the deadline neared for new penalties to take effect, a ship laden with US soybeans raced toward the Chinese port of Dalian, capturing the attention of users on the Chinese social media site Weibo, reports Reuters. "You are no ordinary soybean!" one user wrote in regard to the ship Peak Pegasus, which set out from Seattle last month. "Good luck bro!" wrote another. However, Reuters reports that the Pegasus arrived just a smidge late to beat the deadline, and Bloomberg also reports that the ship "looks to have lost its race"—unless perhaps Chinese officials were feeling generous. Related coverage: Soybeans? They just happen to be the top American agricultural export to China, as an interactive graphic at Reuters reveals. China took in about $12 billion worth last year. US farmers' pain will be Brazilian farmers' gain, reports Fortune. One huge factor: CNBC reports that a major issue behind this trade war is 5G—and whether the US or China will be the nation to dominate the next generation of the mobile internet. This is about far more than faster download times, however. "It is being touted as a technology that could support the next generation of infrastructure, from the billions of internet-connected devices expected to come online in the next few years, to smart cities and driverless cars."