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Home | Tag Archives: trump trade war

Tag Archives: trump trade war

Trump Administration Will Aid Farmers Hurt by Trade War. Some Texas Lawmakers Call it Welfare

The Trump administration on Tuesday announced up to $12 billion in emergency aid for farmers impacted by the president’s trade war — which came as welcome relief for Texas farmers who were afraid the tariffs would hurt their business. But some Texas lawmakers have criticized the move and called on the president to end the tariffs.

President Donald Trump issued a slew of tariffs on Chinese goods earlier this month, prompting China to respond with tariffs on $34 billion worth of U.S. goods. The Chinese tariffs threatened to deal a serious blow to Texas agriculture, which provides nearly half of U.S. cotton exports to China.

China purchased $16 billion worth of Texas goods in 2017, making it the third largest recipient of the state’s international exports.

The tariffs came as the U.S. agricultural sector was already in a state of decline, said Gene Hall, spokesman for the Texas Farm Bureau. Just before the tariffs went into effect, farm-related income was about half of its 2013 value, according to the U.S. Department of Agriculture.

“Our crop is poor, and then you put a poor price on top of that, and myself included and many of my neighbors, we’re going to struggle to make ends meet on our grain sorghum crop this year,” said Scott Frazier, a sorghum and cotton farmer south of Corpus Christi. “So for us any little bit of help to get past this trade war issue is going to be significant.”

Farmers will be able to sign up for the aid in September, and it will be funded by the Commodity Credit Corporation, a federal program that provides relief for farmers by buying their crops, often after natural disasters or other crises. This will be the first time the program has been used to alleviate the effects of a trade conflict.

Arlan Suderman, chief commodities economist at financial advising firm INTL FCStone, said the tariffs are unlikely to last long because China won’t be able to pay higher prices for U.S. goods indefinitely and alternative partners like Brazil won’t be able to keep up with Chinese demand.

Suderman said he believes the federal aid to farmers is politically motivated. Trump garnered wide support in rural areas and with the midterm elections less than four months away, he needs to shore up support from farmers harmed by the tariffs, he said.

Hall said the tariffs and the federal aid are only temporary measures as the administration tries to force China to the negotiating table to end what they call predatory practices — such as restrictions on allowing new U.S. commodities into the Chinese market.

Frazier said he and his neighbors will have a hard time paying their bills under the current tariffs. But he and Hall said Trump’s moves haven’t soured their opinion of the president, who revealed his protectionist stances during his campaign. Frazier said the aid package showed Trump’s commitment to helping U.S. agriculture.

But not everyone is so positive. Casey Guernsey, spokesman for Americans for Farmers and Families, said he would much rather see the administration makingbetter trade deals instead of launching tariffs, which he said have not been effective in the past.

“Ninety-five percent of the world’s consumers live outside the U.S. Those are our customers,” Guernsey said. “We don’t need aid from Washington to not only survive, but prosper.”

Trump’s $12 billion plan met with mixed reviews on Capitol Hill. U.S. Rep. Mike Conaway, a Midland Republican who chairs the U.S. House Agriculture Committee, defended the tariffs and the aid package.

“The president’s efforts to stand up on behalf of American producers and not allow the Chinese to use them as a weapon against us I think is the right thing to do,” he said. “It is the president’s attempt to try to not let China use our producers as leverage.”

But providing payments to farmers is not viable long-term, he added.

“Trade is the long-term solution. But in the meantime, we’ve got to have China agree to abide by their agreements they’ve agreed to, and that’s what this is all about,” he said.

Several Republican lawmakers from Texas who typically fall in line behind Trump spoke out against the plan — an indication that the tariffs are driving a wedge between the president and congressional allies from rural states.

U.S. Sen. Ted Cruz, R-Texas, denounced the financial assistance as “a mistake” on the Chad Hasty Radio Show. “The answer should not be government aid. It should be allowing farmers and ranchers to sell their goods,” he said.

The most biting rebuke came from U.S. Rep. Jeb Hensarling, R-Dallas, a staunch free market advocate who told CNBC he thinks Trump has overstepped his authority.

“I think that Donald Trump has too much power, and I think that Congress needs to reassert their authority,” he said. “And last I read the Constitution, it’s Congress that has authority over tariffs, it’s Congress that has authority over trade, and we ought to take some of that back.”

He added: “We have a policy now that is taxing the American consumer and then bailing out U.S. farmers with welfare. I don’t get it. I don’t agree with it.”

Trump fired back at critical lawmakers on Twitter Wednesday morning, calling them “weak.”

Disclosure: The Texas Farm Bureau has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

Authors:  MATTHEW CHOI AND CLAIRE PARKER – The Texas Tribune

Administration Announces Aid to Help Farmers Hurt by Tariffs

Texas farmers and ranchers impacted by retaliatory tariffs welcomed the temporary relief measures announced Tuesday by the U.S. Department of Agriculture (USDA).

A robust trade market, however, is still the ultimate goal, according to the president of the state’s largest farm and ranch organization.

“This short-term funding will help farmers and ranchers who rely on export markets stay in business as the administration works to develop and obtain new markets,” Texas Farm Bureau President Russell Boening said.

USDA outlined $12 billion in relief funding for three programs to help farmers and ranchers hurt by market disruptions. The relief funding correlates to the estimated $11 billion impact current trade tensions have on U.S. agriculture.

The funding will be split between three USDA programs: Market Facilitation, Food Purchase and Distribution and Trade Promotion. The relief package is expected to be operational by September 3.

“We appreciate the administration and USDA taking this action to support American agriculture, but certainly, farmers and ranchers would rather sell their products to domestic and export markets through good trade relationships,” Boening said.

“We support the administration’s continued talks with our trading partners and look forward to both new and improved markets.”

“No Question, it’s Going to Hurt”: Trump Trade War with China Worries Texas Agriculture

There’s a Chinese proverb: Sow melons, reap melons. Sow beans, reap beans.

In other words, expect tit for tat.

President Donald Trump — and by extension many of the nation’s farmers — is seeing that lesson in action after he launched a bevy of tariffs against China on Friday, prompting the People’s Republic to retaliate with its own tariffs on imports from the United States. Among those American goods are some key Texas exports, including cotton, corn and sorghum. Some of the Chinese goods targeted in Trump’s tariffs are vital parts for Texas’ agriculture industry, such as livestock equipment.

“No question, it’s going to hurt,” said Gene Hall, a spokesperson for the Texas Farm Bureau.

Throughout his presidential campaign and since he was inaugurated, Trump has threatened to amp up protectionist measures on the world’s second-largest economy. It was a campaign issue that resonated with many Trump voters, including many Texas farmers.

“We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S.,” Trump tweeted in April. “Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!”

On Friday, the United States levied tariffs on $34 billion worth of Chinese goods. China responded with its own tariffs on $34 billion in U.S. exports.

The Chinese Ministry of Commerce called the United States a “typical trade bully” set on igniting the largest trade war in history and violating World Trade Organization agreements.

“Instead of serving the interests of U.S. companies and people, the move will prove to be counter-productive and damaging,” the Chinese commerce minister said in a statement.

For Texas farmers, the trade war plays havoc with their bottom line. Tens of billions of dollars of goods trade between China and Texas each year. Texas exported $42 billion in goods to the country in 2017, second only to Mexico.

Cotton is the state’s 10th largest export. Nearly half of the U.S. cotton exported to China comes from Texas. Soy is a smaller market for Texas but China is the state’s largest international soy customer. Texas exports about $157 million worth of corn a year, making it the 13th largest exporter of the crop in the country, though U.S. corn exports to China have dropped precipitously over the past few years due to increased regulations on the Chinese side.

Wesley Spurlock, a corn farmer in Stratford and chairman of the National Corn Growers Association, said the weeks of talk of a trade war had already hurt Texas farmers. The prices of corn and soy have both decreased by around 15 percent since mid-May. The price of cotton has decreased by over 11 percent since mid-June. Spurlock credits those declines with the threat of tariffs, a situation that could be exacerbated with their enactment.

Dee Vaughan, a corn and cotton farmer from the Panhandle, said even the threat of tariffs has caused shipping companies to be more hesitant buying his crop. Prices had already been low going into the spring, he said, though farmers were “cautiously optimistic” about this year’s revenues. But “simply because of the uncertainty, if nothing else, all the rhetoric that’s going on” for the past few months has been keeping farmers worried that they’ll be able to make fewer sales.

“You couldn’t pick a worse time for agriculture to be in a trade dispute,” said Hall, the Texas Farm Bureau spokesperson pointing to a 50 percent decline in agricultural income since 2013. He said the farm bureau always supports negotiating trade disputes over gratuitous tariffs — but that many farmers hope the president’s actions will force China, which has historically acted in ways that have harmed Texas agriculture, to the negotiating table.

“There is some patience in the agricultural community for what the president’s doing, but there is some angst as well,” Hall said.

As China’s middle class expands and demand for protein grows, soy has become essential in providing feed for the country’s growing beef industry, Spurlock said. China imports more than half of American soybeans, and the United States is the second-largest soy exporter to China, representing about 34 percent of the country’s soy imports. Spurlock fears the new tariffs will push Chinese consumers to look to other producers to get their soy, such as Brazil, which already accounts for more than half of all soy imports in China.

The tariffs will also make agricultural equipment more expensive, but Spurlock said those rising costs are more of an inconvenience than a damning new expense. Vaughan echoed that sentiment, saying he is more concerned about not being able to sell his crop than the rising cost of farm equipment since he doesn’t need to buy equipment very often.

Though the agriculture industry will face a bitter few months with rising costs and damaged competitiveness, Spurlock said he hopes the tariffs work to improve and smooth trade between the United States and China, whose byzantine bureaucracy makes penetrating the market slow and cumbersome. If the tariffs work to bring China to the table to expedite trade allowing corn to become a major export to China, Spurlock said the United States could become the world’s leading food producer.

But when asked if he is optimistic the tariffs will work, Spurlock said, “I have to be optimistic.”

Disclosure: The Texas Farm Bureau has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

Author: MATTHEW CHOI – The Texas Tribune

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