Iowa Republican: $12B bailout is proof that Trump's tariffs hurt farmers

Aaron Brown
July 31, 2018

Global demand is strong, said Arlan Suderman, the chief commodities economist at the advisory firm INTL FCStone, and the the world's largest soybean producer.

President Trump and EU's Jean-Claude Juncker announced a temporary truce that would keep the Trans-Atlantic alliance intact and avoid any further escalation of a trade war.

In an interview with CNBC that aired Friday morning, Trump renewed his threat to ultimately slap tariffs on a total of $500 billion of imports from China-roughly equal to all the goods Beijing ships annually to the United States. Granite City Works restarted two of its furnaces and hired hundreds as a result of the tariffs the administration placed on steel.

Heading towards zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods, Juncker said they agreed to strengthen energy cooperation.

Trump then threatened further tariffs, this time on automobiles, prompting cries of anguish from US auto companies and the companies that do business with them.

US soybean production has doubled since the mid-1990s and total exports have doubled since the mid-2000s. In its talks with Mexico and Canada to rewrite the North American Free Trade Agreement, the United States put rules of origin for the auto sector at the forefront, at one point demanding higher USA content for vehicles to be eligible for NAFTA tariff-free access. "The lobsterman and lobster dealer, yes, but every single person we do business with".

"As far as the deal is concerned, it seems that US President Donald Trump has got all he wanted", Petr Bystron, Chairman of the legislature's Foreign Affairs Committee for the opposition Alternative fuer Deutschland (AfD) fraction, told Xinhua in an exclusive interview.

Sacha Chorley, portfolio manager at Quilter Investors, commented: "The Trump-Juncker meeting was a potential tipping point that could have prompted the fledgling trade war to spiral into something more damaging".

Trump's narrow view on trade dismisses how interconnected the world economy is now. They provide an enticing target for countries looking to retaliate against Trump's tariffs. As long as Germany is less interested in fighting this war than France because of the importance of its US exports, the European Union is hamstrung in its decision-making. In Europe, alarm bells have been sounded over China's growing economic influence there.

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"President Trump's tariff plan will be beneficial for some, but not for others depending on commodities", Sumter County Councilman Chris Sumpter said. "I don't think this will cover us for a very long time - and it might not even buy me a tank of diesel".

"Chinese companies already own significant parts of the military supply chain", said Mr. The IMF raised its estimate for China's growth in 2018 in January after the economy unexpectedly accelerated previous year.

"This is a self-inflicted wound that borrowing $12 billion won't solve", U.S. Sen., Claire McCaskill, D-Mo., said last week.

But if Trump's tariffs on steel, solar panels and other goods are hurting farmers, the obvious solution is not an expensive $12 billion subsidy program.

Trump has come under political pressure from USA farmers over his trade actions that have seen American agricultural produce hit hard with retaliatory tariffs, especially by China, the largest single consumer of American soybean exports.

"I just think he can not operate the way he is, and anybody who stays close to him is going to rue the day", Nixon said. Because the U.S. fears, that by doing so, China could threaten its top position in high-end manufacturing.

After Beijing offered this spring to buy more natural gas and farm goods from the United States to narrow the trade deficit, Treasury Secretary Steven Mnuchin said the trade war was "on hold".

Tariffs "act as a tax on American consumers, raise costs for our manufacturers and drive our jobs to other countries", these groups wrote in an op-ed for USA TODAY.

At the meeting, the European Union and Japan joined the U.S. in sharing Washington's consensus against China, with the European Union suggesting a comprehensive reform of WTO rules to bring about new industrial subsidies that would address the "trade-distorting" practices of the Chinese state-owned companies.

Other reports by Free-Prsite

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