5 years, 9 months ago by Jim Dewey
A Bloomberg report says President Donald Trump is threatening to put a tariff on every single import from China. The world’s two largest economies exchanged blows in a trade war that isn’t expected to end anytime in the near future. After months of trade rhetoric back and forth, a 25 percent tariff took effect on $34 billion Chinese goods entering the U.S. just after midnight, Washington time, on Friday. Farm equipment and airplane parts are just a couple of the many items targeted by the duties. China immediately hit back with duties on U.S. shipments, including soybeans and automobiles. Neither side appears to want to back down, either. Trump is already eyeing another $16 billion in tariffs and says the overall total could reach up to $500 billion. China’s Commerce Ministry is accusing the U.S. of “bullying” and igniting the “largest trade war in history.” Bloomberg says there is a risk that a spiraling conflict will undermine economic growth and inflict higher prices on both consumers and companies. The Federal Reserve has already noted that some firms have been slowing investments.
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Farmers for Free Trade React to Tariff War Escalation
More tariffs have officially gone into effect between China and the U.S, worth $34 billion, and Farmers for Free Trade says it’s hitting producers directly in the pocketbook. Brian Kuehl (cool) is the group’s Executive Director, and he says the evidence of pain from a now multi-front trade war is multiplying every day. “From China canceling soybean orders, to cheese exports to Mexico plummeting, to farm equipment prices rising, the stories of financial loss are now rolling in from across America,” he says. “Today’s actions will only create more nightmare stories of farmers’ livelihoods being squeezed.” One of those farmers is Brent Bible, a soybean and corn farmer from Indiana, who says these actions are a direct financial hit. “This is money out of my pocket,” Bible says, “and these tariffs could mean the difference between a profit and a loss for an entire year’s worth of work out in the field. That’s only in the near term. Over the long haul, producers are deeply concerned that China will continue to replace American soy with that of our competitors.” Bible adds that these losses shouldn’t be made up by government programs, saying that “frustration is growing quickly in the heartland and we need this solved now.”
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Equipment Manufacturers: Trade War Bad for Business, Risks Jobs
Dennis Slater, President of the Association of Equipment Manufacturers, says his organization is disappointed that the Trump Administration is moving forward with more tariffs on China. Slater says the tariffs target vital parts and components used in equipment manufacturing throughout the U.S. “They will also drive up the cost of manufacturing in the U.S. and risk many of the 1.3 million good-paying manufacturing jobs our industry supports,” Slater says. “Combining this with China’s promise to retaliate against U.S. products and agricultural commodities only further erodes the benefits of last year’s tax reform, hurting the entire U.S. economy.” Slater says, while the president is right to address China’s intellectual property theft and unfair trade practices, taxing American citizens won’t fix the problem. Starting today (Friday), U.S. Customs and Border Protection will now collect duties on $34 billion dollars worth of tariffs. An additional $16 billion in more tariffs are said to be in the works.
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Groups React to Pruitt Resignation
President Donald Trump accepted the resignation of Scott Pruitt on Thursday as head of the Environmental Protection Agency. The Senate has already confirmed Deputy Administrator Andrew Wheeler as the acting administrator. Bob Dineen of the Renewable Fuels Association says the resignation was needed. “For the past year, Scott Pruitt has been waging war on the Renewable Fuels Standard, the biofuels industry, as well as the millions of farmers and rural Americans that helped Donald Trump get elected,” Dineen says. “Mr. Pruitt evidently thought RFS stood for Refinery First Standard.” American Coalition for Ethanol Executive Director Brian Jennings says Pruitt’s fumbling of the ethanol issue is what brought him down. “Time and time again, we saw the White House make very specific promises,” Jennings says, “and time and time again, we saw Pruitt either fail to live up to those promises or do the exact opposite of what the president wanted.” Growth Energy CEO Emily Skor says Pruitt’s tenure put a definite strain on the relationship between the president and the rural Americans who played a big part in getting him elected to the office. National Corn Growers President Kevin Skunes says they were very frustrated with Pruitt’s actions and will continue pushing the agency to stop granting unjustified RFS waivers.
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Corn Exports Hit Record High in April
U.S. corn exports reached an all-time high of 7.7 million tons in the month of April. Through May, year-to-date corn shipments were estimated at 29 million metric tons. USDA projections for exports in the 2017/18 crop marketing year (September through August) were raised to 58.4 million metric tons. The previous monthly record for corn exports was set nearly 30 years ago, back in November of 1989. The projections for May exports, based on export inspections, are higher than usual at this time of year, suggesting continued strength in the U.S. corn export market. At least some of the reason may be due to a continuing drought in Argentina, a major corn supplier, which likely means reduced exports prospects there. In addition, Brazil is expected to have a poor corn crop this year, due in part to dry weather and less planted acreage for the second cropping season. As a result, countries in the market for corn have fewer options to choose from, which increases the competitiveness of U.S. corn.
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Sugar Policy Reformers Aren’t Done
Business and taxpayer groups trying to overhaul federal sugar policy say they’re down, but not out, after the Senate failed to consider their amendment during the farm bill debate. Politico says the Alliance for Fair Suger Policy includes the National Confectioners Association, the American Bakers Association, as well as retailer and consumer groups. The group blames the lack of action on the Senate Agriculture Committee’s determination “to advance the farm bill by July fourth.” The group added that the Senate believed it could defeat any significant changes to the bill, including potential changes on SNAP and sugar policy. Alliance spokeswoman Jennifer Cummings says, “The Senate moved the farm bill as quickly as possible, and the lack of debate on the amendments doesn’t mean there wasn’t widespread bipartisan support for them.” The group says it’s looking ahead to the next opportunity for bringing up sugar reform, though it’s not quite clear when that might be.
