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Top Republicans rip Trump’s farm-aid plan as ‘welfare,’ ‘Soviet type of economy’

Market Watch  /  July 25, 2018

Republican senators from agricultural states were quick to condemn President Donald Trump’s plan to offer farmers $12 billion in emergency aid to offset the impact of the administration’s escalating trade war with China.

A number of top lawmakers said the plan does little to solve the overall problem — the Trump administration’s own trade policies — and goes against free-market principles.

“You have a terrible policy that sends farmers to the poorhouse, and then you put them on welfare, and we borrow the money from other countries. It’s hard to believe there isn’t an outright revolt right now in Congress over what is happening.” Sen. Bob Corker, R-Tenn
 

In a statement, Tennessee Republican Sen. Bob Corker called Trump’s trade policy “incoherent” and that the administration was “offering welfare to farmers to solve a problem they themselves created.”

Corker later told Bloomberg News that it was “a terrible policy” that should have Congress revolting.

Sen. Ben Sasse, R-Neb., said in a statement: “This trade war is cutting the legs out from under farmers and the White House’s ‘plan’ is to spend $12 billion on gold crutches. . . .America’s farmers don’t want to be paid to lose — they want to win by feeding the world.”

Responding to a speech Trump made Tuesday in Kansas City, Mo., in which he claimed farmers would benefit from his tariffs, Sen. Chuck Grassley, R-Iowa, said: “The president’s going to have to say more than ‘I like the farmers and I support the farmers,’” Bloomberg News reported.

Sen. Ron Johnson, R-Wisc., said Trump’s bailout plan was downright un-American.

“This is becoming more and more like a Soviet type of economy here. Commissars deciding who should be granted waivers. Commissars in the administration trying to figure out how they’re going to sprinkle around benefits,” he said.

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Johnson is right. It's a hypocritical situation. We constantly criticize the Chinese government for giving select industry financial support......and then we do the same thing.

Low soy bean prices this season is not going to break the farmers. A cyclical industry, it's not the first season that prices were low. Always been the nature of the business. When prices are high, you don't hear a peep.

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Trump Threatens to Pull US out of WTO if It Doesn’t ‘Shape Up’

Transport Topics  /  August 30, 2018

President Donald Trump said he would pull out of the World Trade Organization if it doesn’t treat the United States better, continuing his criticism of a cornerstone of the international trading system.

“If they don’t shape up, I would withdraw from the WTO,” Trump said Aug. 30 in an Oval Office interview with Bloomberg News.

A U.S. withdrawal from the WTO potentially would be far more significant for the global economy than even Trump’s growing trade war with China, undermining the post-World War II system that the United States helped build.

Trump said last month that the United States is at a big disadvantage from being treated “very badly” by WTO for many years and that the Geneva-based body needs to “change their ways.”

U.S. Trade Representative Robert Lighthizer has said allowing China into the WTO in 2001 was a mistake. He has long called for the United States to take a more aggressive approach to WTO, arguing that it was incapable of dealing with a nonmarket economy such as China.

Lighthizer has accused WTO dispute-settlement system of interfering with U.S. sovereignty, particularly on anti-dumping cases. The United States has been blocking the appointment of judges to WTO’s appeals body, raising the possibility that it could cease to function in the coming years.

Since World War II, successive U.S. presidents have led efforts to establish and strengthen global trading rules, arguing that they would bring stability to the global economy.

WTO was created in 1994 as part of a U.S.-led effort by major economies to create a forum for resolving trade disputes.

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Senator calls for investigation of tariff exemption process

Kevin Jones, Trailer-Body Builder  /  August 30, 2018

Sen. Elizabeth Warren says the Trump administration is playing politics, and handing out favors to friends, in the Commerce Department’s management of the exemption process for steel and aluminum tariffs.

On Wednesday Warren called on the department’s Inspector General (IG) to open an investigation into the implementation of the program, initially billed as a "fair and transparent" way for U.S. manufacturers to seek tariff relief in certain instances. But Warren’s own preliminary investigation has revealed the process to be “replete with mistakes” and “arbitrary, opaque and subject to political favoritism.”

"Thousands of companies are seeking exemptions worth billions of dollars that affect manufacturing and investment decisions nationwide," the Massachusetts Democrat writes to IG Peggy Gustafson. "But this process appears to be running on an ad hoc basis, with little transparency, and bending to political pressure from well-connected lobbyists and Administration officials."

Specifically, to date Commerce has received 30,035 exemption requests for tariffs on steel (25%) and aluminum (10%) imports, and has made decisions on 3,559 of those, approving 2,101 and denying 1,458, according to department data. But, as tens of thousands of requests are left hanging, special friends of the administration have received special treatment, Warren contends.

On August 7 she sent a 10-page letter to Secretary of Commerce Wilbur Ross after she found that Rusal America Corporation had received an exemption for aluminum, good for 6.6 million pounds’ worth, tariff free. The kicker: Rusal is a subsidiary of a sanctioned Russian company controlled by Oleg Deripaska, a sanctioned Russian oligarch and a "close Putin confidant,'' the letter states.

And the day after Warren sent the letter, the Commerce Department reversed the exemption—but still has not explained how a sanctioned Russian company got an exemption for millions of dollars of aluminum imports just days after President Trump met privately with President Putin in Helsinki.

More details of how the Rusal exemption was approved are “equally alarming,” the senator writes: The July exemption was approved after Commerce Department officials appeared to privately inform Rusal that the company needed to provide more  information in a new submission; this even though Rusal appeared to have made no effort to find alternative U.S. producers; and over the objection of a domestic producer of the material sought by Rusal.

Additional media reports have raised questions about political interference in the exemption process, Warren continues. United States Steel and Nucor—two of America's biggest steel manufacturers with deep ties to the Administration—have successfully objected to hundreds of exemption requests.

And, earlier this month, reports revealed that Office of Management and Budget Director Mick Mulvaney was "trying to use his influence" to urge the Trump administration for an exemption for a company whose president contributed $5,400 to Mulvaney's 2016 congressional campaign, the senator says.

Warren asked the Commerce IG to conduct a thorough investigation of the department's process for evaluating tariff exemption requests, including an analysis of the processes and procedures in place to make these decisions, whether Commerce officials are following these policies and procedures, and any credible evidence that tariff exemptions granted by the department have strengthened the national security of the United States.

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I'm absolutely shocked.....shocked I tell you, to hear that the tariff exemption process could be replete with mistakes, arbitrary, opaque and subject to political favoritism. Say it isn't so.

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Trump threatens tariffs on additional $267 billion in China imports

Steve Holland, Reuters  /  September 7, 2018

WASHINGTON -- U.S. President Donald Trump said on Friday that he has tariffs ready to go on a further $267 billion worth of Chinese imports, as the world awaits his decision on imposing levies on $200 billion worth of the Asian nation's goods.

“The $200 billion we are talking about could take place very soon depending on what happens with them. To a certain extent its going to be up to China, Trump said. "And I hate to say this, but behind that is another $267 billion ready to go on short notice if I want. That changes the equation.”

Hours after a public comment period closed on his $200 billion China tariff list, Trump told reporters aboard Air Force One that he was "being strong on China because I have to be."

Trump also said on Friday the United States and Japan have begun discussion over trade, saying that Tokyo "knows it's a big problem" if an agreement cannot be reached.

"We're starting that," Trump told reporters aboard Air Force One. "In fact Japan has called us ... they came last week."

"If we don't make a deal with Japan, Japan knows it's a big problem," he added.

Trump, who is already challenging China, Mexico, Canada and the European Union on trade issues, has expressed displeasure about his country's large trade deficit with Japan, but had not asked Tokyo to take specific steps to address the imbalance.

On Thursday, though, CNBC reported he had told a Wall Street Journal columnist he might take on trade issues with Japan, causing the dollar to slip against the yen.

More on China

Trump has already imposed 25 percent tariffs on $50 billion worth of Chinese goods, mostly industrial machinery and intermediate electronics parts, including semiconductors.

The $200 billion list, which includes some consumer products such as cameras and recording devices, luggage, handbags, tires and vacuum cleaners, would be subject to tariffs of 10 percent to 25 percent.

Cell phones, the biggest U.S. import from China, have so far been spared, but would be engulfed if Trump activates the $267 billion tariff list.

Trump's threatened tariffs, now totaling $517 billion in Chinese goods, would exceed the $505 billion in goods imported from China last year. But 2018 Chinese imports through July were up nearly 9 percent over the same period of 2017, according to U.S. Census Bureau data. 

Earlier on Friday, White House economic adviser Larry Kudlow told Bloomberg Television the administration would evaluate public comments before making decisions on the $200 billion tariff list.

The U.S. Trade Representative's office received nearly 6,000 comments and held seven days of public hearings on the proposed levies.

Most comments were from companies seeking to remove products from the tariff list, arguing there were few, if any alternative sources and the duties would cause financial hardship. Comparatively few applauded the tariffs.

Retailers had successfully kept high-profile consumer electronics such as cell phones and television sets off of previous tariff lists. But David French, top lobbyist for the National Retail Federation, whose members include Amazon.com, BJ’s Wholesale Club and Macy’s, said nearly every consumer good could be affected if Trump follows through on all threatened tariffs.

"The Chinese aren't paying these tariffs, American families are going to pay these tariffs. These are taxes and they're going to find their way into the pocket book of folks around the country," French said.

Still talking to China

Kudlow, who heads the National Economic Council, told CNBC the administration was still talking with China about trade issues but so far China had not met U.S. requests. 

The United States has demanded that China better protect American intellectual property, cut its U.S. trade surplus, allow U.S. companies greater access to its markets and roll back its high-technology industrial subsidy programs.

"We are still talking with China on a number of issues ... Those talks will continue to go on. We want lower (trade) barriers across the board," Kudlow said.

Specifically, Kudlow said, the United States was seeking "zero tariffs, zero non-tariff barriers, zero subsidies, stop the IP theft, stop the technology transfer, allow Americans to own their own companies."

"Those have been our asks for many months and so far those asks have not been satisfied," he said. "However, hope springs eternal."

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Reuters  /  October 11, 2018

U.S. President Donald Trump warned on Thursday there was much more he could do that would hurt China’s economy further, showing no signs of backing off an escalating trade war with Beijing.

“It’s had a big impact,” Trump said. “Their economy has gone down very substantially and I have a lot more to do if I want to do it.

“I don’t want to do it, but they have to come to the table.”

However, Trump said the Chinese want to negotiate but he does not believe they are ready and he told them so. He blamed previous U.S. presidents for allowing China to pursue unfair trade practices and said he had to tell Beijing, “It’s over.”

“They lived too well for too long and, frankly, I guess they think the Americans are stupid people. Americans are not stupid people. We were led badly when it came to trade.”

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