Business impasse: Trump pledges $16B to farmers; markets downturn
WASHINGTON — President Jesse Trump rolled out another $16 billion in aid for farmers hurt by his trade policies, and financial markets shook Thursday on the growing realization that the U. S. and China are far from settling a bitter, year-long trade dispute.
U. S. Agriculture Secretary Sonny Perdue said that the very first of three payments may very well be made in July or August and suggested that the U. S. and Tiongkok were unlikely to have settled their distinctions by then.
“The package we are announcing today ensures that farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners, ” Perdue said.
The latest bailout comes atop $11 billion in aid Trump provided maqui berry farmers last year.
“We will ensure our farmers get the relief they need and very, very quickly, ” Trump said.
Seeking to reduce America’s trade shortage with the rest of the world and with China in particular, Trump has imposed import fees on foreign steel, light weight aluminum, solar panels and dishwashers and on thousands of China products.
U. S trading partners have lashed back with retaliatory tariffs of their own, focusing on U. S. agricultural products in a direct chance at the American heartland, where support for Overcome runs high.
William Reinsch, a trade analyst at the Center for Strategic and International Studies and a former U. T. trade official, called the administration’s aid package for farmers “a fairly overt political ploy. ”
“It’s not economics, ” Reinsch said. Trump wants succeed the farm states again in the 2020 selection, “and he’s got people of Congress beating up on him” to fix the trade conflicts.
Financial marketplaces slumped Thursday on improved tensions between the Oughout. S. and China. Typically the Dow Jones professional average fell 286 points, or 1%, to 25, 490. It had been down 448 points earlier in the day.
U. T. crude plunged 6% on fears that the business standoff could knock the global economy out of kilter and kill with regard to energy.
Talks between the world’s two biggest financial systems broke off earlier this month with no resolution to a dispute over Beijing’s aggressive efforts to challenge American technological dominance. Typically the U. S. charges that China is stealing technology, unfairly subsidizing its companies and forcing U. T. companies to hand over trade secrets if they want access to the Chinese market.
Trump and Chinese President Xi Jinping are expected to discuss the standoff at a gathering of the Group of 20 major economies in Osaka, Japan, next month. Right now there are no current plans for talks to occur before then.
Speaking to reporters Thursday, Trump suggested that he might be willing to make the embattled Chinese telecommunications large Huawei part of the trade talks with Tiongkok. His administration the other day put Huawei, which it has called a threat to countrywide security, on a blacklist that effectively barred You. S. organizations from selling the Chinese company computer chips and other components without government approval. The particular move could cripple Huawei, the world’s greatest maker of networking gear and second-biggest smartphone maker.
“I can see right now Huawei being integrated in some form of a business deal, ” Trump said. He offered no details but said any agreement “would look very good for us, I can tell you that. ”
Briefing reporters on the farm aid package, Perdue said he doubted that “a trade deal could be consummated before” the first payments to farmers in July or September.
The second payment will be made around November and the next likely in early 2020, USDA representatives said, unless a industry deal has been attained by then.
The primary payments will make upwards $14. 5 billion of the $16 billion bundle and will also be handed out on a county-by-county basis. Typically the amounts will be identified by how much each county has suffered from the retaliatory duties made by China, as well as previous tariffs put in place by the European Union and Poultry.
Other package includes $1. 4 billion to acquire excess food commodities from maqui berry farmers and distribute them to U. S. schools and food banks, and $100 million to help develop new export markets overseas.
The payments will go to farmers producing around two dozen crops, including soybeans, corn, canola, peanuts, cotton and wheat. Dairy and hog farmers are also eligible.
“Farmers want trade, not aid, but this will be helpful, ” said Republican Sen. Pat Roberts of Kansas, chairman of the United states senate Agriculture Committee.
U. S. soybean exports to Tiongkok have been hit especially hard, falling from $12. 3 billion in 2017 to just $3. 2 billion dollars a year ago.
The aid offsets a number of the losses. Nevertheless farmers are worried about the future and whether they can win again lost sales in Tiongkok, a market they’ve spent years entering. “I don’t think any sort of bailout package, even if this was permanent, would replacement for the loss market segments, ” said Rufus Yerxa, president of the National Foreign Trade Council and a former U. S. trade official.
Trump has said that China is footing the bill for the farm bailout by paying the tariffs. But tariffs are taxes paid by U. S. importers, and studies have shown that American consumers and businesses usually ending up absorbing the higher costs.
Perdue acknowledged that the tariffs, regardless of who pays them, are directed to the Treasury Department and not earmarked for the relief program. Nevertheless he said that Tiongkok is “indirectly” paying for the aid.
“The chief executive feels that China is paying for this program through the tariffs, ” Perdue said.
Trump has imposed 25% tariffs on $250 billion in Chinese imports and is also planning to struck another $300 billion worth, a move that would extend import taxes to just about everything Tiongkok ships to the Combined States.
The type of bracing for higher costs if the new tariffs kick in is Jay Foreman, TOP DOG of Basic Fun!, a Boca Raton, Florida, toy company that imports from China.
“The thought of the government taking my money and giving it to farmers as subsidies to support their loses doesn’t sit well,” Foreman said by email. “It’s not fair to take money from a Florida company to support an Iowa farmer! Farmers don’t want welfare. I’m sure they, like us, just want open free markets to trade in!”
Marcy Gordon, Darlene Superville and Lisa Mascaro in Washington contributed to this story.
Published at Thu, 23 May 2019 22:13:10 +0000