Rural America feels the sting of Trump's China trade war

s002wjh · May 20, 2019

farmer/rural american vote for trump, now they suffer. maybe trump will give them few billions handout like he did with soybean

https://www.cnn.com/2019/05/19/politics/china-trade-war-trump-rural/index.html

President Donald Trump's trade war with China is biting rural America.

Most Americans haven't yet felt the pain of the tariffs Trump imposed last year, which largely hit industrial components rather than consumer goods. But that's changing as Trump escalates his standoff with Beijing.
Farmers in the heartland, many of whom backed Trump because of his promise to rein in the top US economic competitor, are anxious about the threat of renewed retaliatory tariffs after China canceled purchases of US soybeans last year.
Both Walmart and Macy's say they might need to raise prices if Trump goes ahead with expanding tariffs to cover almost everything China exports to the US, from toys to clothes and hardware.

And his move this week to limit the reach of major Chinese telecommunications company Huawei, which sells cheap equipment chiefly to small, rural phone and internet service providers, could wind up raising prices for customers in the heartland.
Telecom companies in rural areas may face increased costs or network disruptions if they are unable to buy the gear they need from Chinese suppliers -- and that could affect customers who depend on those connections.
"Farmers, ranchers, small businesses in rural America, the people who support those businesses in rural America -- your teachers, all that," said Carri Bennet, the general counsel for the Rural Wireless Association, a trade group representing rural telecom companies. "Our members are in small, little communities mainly of under 10,000 people ... It doesn't help them. It ends up hurting them."
Concerns about higher costs stem from the fact that many small and rural telecom providers rely on low-cost transmitters and receivers made by Huawei, the world's largest supplier of telecom equipment. Larger carriers such as Verizon and AT&T do not use Huawei equipment. (AT&T is the owner of CNN's parent company WarnerMedia.)
Trump signed an executive order on Wednesday barring the use of telecom gear from sources deemed to be a national security risk. While the order did not mention Huawei or China by name, the administration moved quickly to place Huawei on a Commerce Department trading blacklist minutes after Trump signed the order, all but ensuring it will be covered by the administration's new rules.
Commerce Secretary Wilbur Ross said Thursday on Fox Business that the administration is willing to work with small and rural carriers to ensure they will not be forced to "rip everything out" that is made by Huawei under the order. And White House officials have said they will be taking input from businesses about how to structure the implementation of the new rules.
But being unable to purchase new Huawei gear could still leave those carriers stuck with aging infrastructure that can't be replaced if it malfunctions, degrades or is destroyed by the weather, said Bennet.
"You wouldn't be able to make a 911 call if the network is down," she said, particularly in rural areas where bigger carriers don't offer any service at all.
The complications surrounding the executive order reflect how a number Trump's initiatives have led to unintended consequences.
Farmers have already been struggling to adapt to Chinese tariffs on US soybeans, corn and wheat.
"Farmers were [Trump's] base," John Wesley Boyd Jr., a Virginia-based soybean farmer, told CNN's Brianna Keilar in a recent interview. "They helped elect this President ... and now he's turning his back on America's farmers when we need him the most."
Trump offered subsidies last year and has said he will push to expand those payments to help farmers out until a trade deal is reached.
But the impact of Trump's latest escalations go beyond just agriculture.
About 2.1 million workers in aircraft manufacturing, beer brewing, tobacco and dozens of other industries stand to be affected by the trade war, according to an April study by the Brookings Institution. The impact would be evenly distributed between red and blue counties, Brookings found.
But a similar study by Axios last week found that Trump's recent escalations could wind up affecting more than five times as many workers. The hardest hits will affect industries based in "rural, deeply red, already-struggling parts of the country," including miners in Texas, furniture makers in North Carolina and sawmills in Alabama.
In the tech industry, as many as 1 million jobs are at risk due to the trade war in states such as Texas, Florida, Illinois and Pennsylvania, according to the Consumer Technology Association.
And, the CTA said, the trade war has forced US businesses to pay nearly $750 million in tariffs for products related to 5G, the mobile data technology the US says is key to economic development.
As a result, American businesses are paying more for infrastructure even as Trump prepares to meet with Democratic leaders next week to discuss funding for a $2 trillion infrastructure proposal.
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https://www.politico.com/story/2019/05/20/trump-trade-war-2020-1455474

President Donald Trump is doing everything he can to soften the economic blow of his trade battle with China, doling out billions of dollars in farmer bailouts and telling Americans that the Chinese are paying the tariffs he’s slapped on U.S. importers.

It’ll be a tough trick to execute, especially if Trump can’t cut a deal and the fight escalates to a full-scale trade war. All available evidence so far suggests it is American businesses and consumers — not the Chinese — paying Trump’s tariffs. And the farm bailout is running into political and logistical headaches.
If the president moves ahead with 25 percent tariffs on everything China exports to the United States, it could amount to a tax hike of more than $2,000 on the average American family, swamping the reduction they won from Trump’s signature legislative achievement — the 2017 tax law.

“It’s sort of like when you have a bad leak in a boat and you are trying to plug it up,” said Beth Ann Bovino, chief U.S. economist at Standard & Poor’s, of efforts to ease the pain of a trade war. “Water is going to win every time. The impacts from the trade dispute with China, especially if it snowballs from here, are going to be felt and there is going to be a lot of pain. And I don’t think the federal government can catch up to it.”

Trump came into office vowing to fundamentally reshape the U.S. economy. But the economy he has overseen so far has been propelled largely by tax cuts, deficit spending and deregulation, the traditional hallmarks of a Republican presiden
Now he’s left with a fundamental reorganization of trade — especially the U.S. relationship with China — as one of his biggest unfulfilled promises. If he fails, the economy is likely to suffer as the stimulus from his tax cuts and spending hikes fades.

The pain will be felt most acutely by lower-income voters who rely on cheap imports and Midwestern farmers who make up critical slices of Trump’s political base and will help decide the outcome of the 2020 election.

Trump’s central political narrative so far has been that the tariffs he’s levied — now at 25 percent on over $200 billion in imports — are being paid by the Chinese, money he’s said he will use to aid farmers now largely unable to sell soybeans, pork, sorghum and other products into the Chinese market due to retaliatory tariffs.

But studies done so far using actual data on prices for American businesses and consumers show that the opposite of Trump’s argument is true.

“The strong conclusion is that so far, U.S. consumers have borne substantially all of the tariff increase,” Deutsche Bank chief economist Michael Spencer wrote in a recent note analyzing available data.

The Peterson Institute for International Economics estimates the China tariffs amount to a tax hike of about $550 per American family. If Trump goes to 25 percent tariffs on over $500 billion in Chinese imports — hitting nearly every category of consumer goods from clothing and diapers to electronics — it could mean a $2,200 tax hike on the average family of three. By contrast, Trump’s tax cut gave middle-income families a tax cut of about $800, according to the Tax Policy Center.

Recent polling data also suggests Trump’s messaging about how his tariffs are good for America and bad for China is not breaking through. A Fox News poll out last week found that by a margin of 11 points — 45 percent to 34 percent — Americans think the tariffs will do more to hurt the economy than help it.
Just last week, retailing giant Walmart warned tariff increases will cause prices for consumers to rise. An analysis by CNBC found that revenue from Trump’s China tariffs, now estimated at around $72 billion, would amount to the largest tax hike as a percentage of the economy since 1993.

All of that comes against a mixed consumer backdrop. The Commerce Department last week said retail sales dropped 0.2 percent in April as consumers reduced spending on clothing, appliances and other items, a potentially worrying signal for a U.S. economy driven mostly by domestic consumption.

But consumer sentiment rose to a 15-year high in the University of Michigan‘s consumer sentiment index out last week, highlighting the whipsaw nature of recent data — and what Trump stands to lose if the trade war spins out of control.

Price hikes are not limited to retailers directly hit by the tariffs. Much as gas stations hike prices when they see others doing it, competitors of those selling goods hit by tariffs often raise their own prices to match those of tariffed goods.

“The costs of U.S. tariffs have fallen entirely on U.S. businesses and households, with no clear reduction in the prices charged by Chinese exporters,” analysts at Goldman Sachs wrote in a note last week. “Second, the effects of the tariffs have spilled over noticeably to the prices charged by U.S. producers competing with tariff-affected goods.”
If the China trade war escalates, Goldman estimated the hit to economic growth could be as much as 0.4 percent — worse if the stock market takes a big hit. Trump is banking much of his reelection campaign on delivering growth of over 3 percent in 2019 and 2020, and such a hit would make it much harder — if not impossible — to get there.

Trump has also made a rising stock market a key metric of his own success, repeatedly touting new highs. But stocks often sell off when it appears China talks are going poorly. The Dow Jones Industrial Average is down around 1,000 points since peaking last October. While most Americans are not directly impacted by daily stock market gyrations, any big declines should the China trade war escalate would amount to a direct hit on Americans’ confidence, as well as a shot to Trump’s own ego.
In the farm sector, Trump is invoking the patriotism of those hit by China’s retaliatory tariffs and promising billions in bailout money to make up the difference in lost exports. The Trump administration last year set aside roughly $12 billion in aid for farmers in the first assistance package. About $9.5 billion was in the form of direct payments to farmers and ranchers. Another $1.2 billion was used to purchase surplus commodities to donate to federal nutrition programs and food banks.

Now it’s planning between $15 billion and $20 billion worth of financial assistance in response to the latest U.S.-China tariff escalation. U.S. agricultural products, of which the U.S. is a net exporter, have been in the crosshairs of countries slapped with tariffs, as governments search for ways to retaliate and hit Trump where it hurts politically.

Farmers — also hit by Trump’s trade battles with Mexico, Canada and the European Union — complained that last year’s aid was insufficient to deal with lost export revenue and crashing commodity prices. And many don’t want to rely on the government.

“Many farmers are really uncomfortable with the word ‘bailout’ and taking this help,” said Bovino.

The aid program has also been hit by problems including a report last week that $62 million went to a Brazilian meatpacking conglomerate owned by a pair of brothers who have confessed to bribing government officials in Brazil. The administration also drew fire for using bailout money to buy ham products from pork producer Smithfield, which is Chinese-owned.

Farm state Republicans have largely backed Trump’s tariff battle with China, but that support may not last indefinitely.

“There is great anxiety among farmers about it,” said Senate Finance Chairman Chuck Grassley (R-Iowa) in an interview. “But also the same farmers that have the anxiety know that China has been cheating the rest of the world for a long period of time and it's got to stop.”

China has a history of targeting politically sensitive areas when it retaliates against the U.S., and the Chinese are highly attuned to Trump’s vulnerabilities heading into his reelection campaign.

Some of the farmers hardest hit by the tariffs are deep in red-state Trump country. Iowa is likely to be a swing state in 2020, as are other states in the Midwest hit by retaliatory tariffs including Ohio, Michigan and Wisconsin.

Democrats, meanwhile, sense a strong opportunity to roast Trump’s farm bailout program. The president is in effect borrowing money from the Chinese, who are big buyers of U.S. debt, to pay farmers who would otherwise sell to China.

“Trade is one of Trump's strongest issues. It helped him win over those Obama voters in 2016,” said Dan Pfeiffer, who served as communications director under President Barack Obama. “Democrats have a golden opportunity to erode a key strength by hitting him hard on a poorly executed trade war.”
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Canell · May 20, 2019

A war needs sacrifices.
I'm sure the farmers and other rural people can be compensated with part of the new tariffs on China.

Doofenshmirtz · May 20, 2019

s002wjh said: ↑

farmer/rural american vote for trump, now they suffer. maybe trump will give them few billions handout like he did with soybean

https://www.cnn.com/2019/05/19/politics/china-trade-war-trump-rural/index.html

https://www.politico.com/story/2019/05/20/trump-trade-war-2020-1455474
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Its about time someone does something. Doing nothing is easy and will end up costing much more.

Woogs · May 20, 2019

Let's call a spade a spade here. This is an economic war but is not about a trade imbalance; it's about market dominance. The US has showed its hand with its actions against Huawei. Now it's gussied up as a matter of "national security".

Merwen · May 20, 2019

Doofenshmirtz said: ↑

Its about time someone does something. Doing nothing is easy and will end up costing much more.
Click to expand...

These consequences are the result of years of foolish, short-sighted foreign manufacturing and trade decisions by our past leaders.

We will be paying for those destructive decisions for years to come.

61falcon · May 20, 2019

Capitalism says go wherever you can make it the cheapest and maximize PROFITS CEO AND EXECUTIVE AND BOARD OF DIRECTORS COMPENSATION!!!

notme · May 20, 2019

Canell said: ↑

A war needs sacrifices.
I'm sure the farmers and other rural people can be compensated with part of the new tariffs on China.
Click to expand...

The US is going socialist.

kazenatsu · May 20, 2019

This won't hurt rural America much. Most of those crops going to foreign export come from big corporate farms. Not a lot of American jobs on those huge farms. Either mechanized or undocumented farm laborers from Latin America.

A few family farms in Middle America will suffer, but just in terms of the numbers the majority of losses will not be on family farms.

These trade policies are likely to benefit the Rust Belt, however.

kazenatsu · May 20, 2019

61falcon said: ↑

Capitalism says go wherever you can make it the cheapest and maximize PROFITS CEO AND EXECUTIVE AND BOARD OF DIRECTORS COMPENSATION!!!
Click to expand...

Yes, big bad evil corporations.
So why aren't you thanking Trump for this policy??

Most of the hurt is on big Agro corporations, and it will help those workers in the unionized Rust Belt, or do you not care about them anymore?

Spim · May 20, 2019

I don't think I've noticed a difference at all.

Sorry!

rcfoolinca288 · May 21, 2019

Doofenshmirtz said: ↑

Its about time someone does something. Doing nothing is easy and will end up costing much more.
Click to expand...

Canell said: ↑

A war needs sacrifices.
I'm sure the farmers and other rural people can be compensated with part of the new tariffs on China.
Click to expand...

Perhaps you want to tell those farmers who are suffering exactly that.

rcfoolinca288 · May 21, 2019

kazenatsu said: ↑

This won't hurt rural America much. Most of those crops going to foreign export come from big corporate farms. Not a lot of American jobs on those huge farms. Either mechanized or undocumented farm laborers from Latin America.

A few family farms in Middle America will suffer, but just in terms of the numbers the majority of losses will not be on family farms.

These trade policies are likely to benefit the Rust Belt, however.
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I see....so those red staters hire illegal immigrants that they are trying to chase out? Those hypocrites.

kazenatsu · May 21, 2019

rcfoolinca288 said: ↑

I see....so those red staters hire illegal immigrants that they are trying to chase out? Those hypocrites.
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Trump's been trying to crack down on it.

Postville, Iowa

AFM · May 21, 2019

s002wjh said: ↑

farmer/rural american vote for trump, now they suffer. maybe trump will give them few billions handout like he did with soybean

https://www.cnn.com/2019/05/19/politics/china-trade-war-trump-rural/index.html

https://www.politico.com/story/2019/05/20/trump-trade-war-2020-1455474
Click to expand...

These tariffs will be gone when the China deal is finalized just as the steel and aluminum tariffs on steel and aluminum have just been lifted as part of the Canada & Mexico trade deal.

s002wjh · May 21, 2019

AFM said: ↑

These tariffs will be gone when the China deal is finalized just as the steel and aluminum tariffs on steel and aluminum have just been lifted as part of the Canada & Mexico trade deal.
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the steel and alu tariff was lifted cause trump can't fight China/Canada/Mexico and eu same time. he screw himself by isolating everybody. He also delay EU auto tariff due to recent China-US trade wars.

AFM · May 21, 2019

s002wjh said: ↑

the steel and alu tariff was lifted cause trump can't fight China/Canada/Mexico and eu same time. he screw himself by isolating everybody. He also delay EU auto tariff due to recent China-US trade wars.
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Can’t make stuff like this ^^^ up.

s002wjh · May 21, 2019

AFM said: ↑

Can’t make stuff like this ^^^ up.
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so it just happen Trump lift those tariff and delay EU auto tariff right when China-US trade war at the highest, coincidence? its simple he can't fight EU/Canada and china same time.

Mr_Truth · May 21, 2019

‘I’ll never vote for him again.’

Farmers regret voting for Trump: https://twitter.com/nowthisnews/status/1130531884935499777

From the days of Reagan, we have seen Republicans repeatedly screw farmers all over the USA. Yet, these dingleberry brained idiots continue to vote Republican. Well, you know the old story ~ stupid is as stupid does. And while I don't want to see farmers get screwed, they have no one to blame but themselves for their problems.

AFM · May 21, 2019

s002wjh said: ↑

so it just happen Trump lift those tariff and delay EU auto tariff right when China-US trade war at the highest, coincidence? its simple he can't fight EU/Canada and china same time.
Click to expand...

And yet he did winning a deal in Canada and Mexico whilst negotiations continue with China and the EU.

AFM · May 21, 2019

Mr_Truth said: ↑

‘I’ll never vote for him again.’

Farmers regret voting for Trump: https://twitter.com/nowthisnews/status/1130531884935499777

From the days of Reagan, we have seen Republicans repeatedly screw farmers all over the USA. Yet, these dingleberry brained idiots continue to vote Republican. Well, you know the old story ~ stupid is as stupid does. And while I don't want to see farmers get screwed, they have no one to blame but themselves for their problems.
Click to expand...

Tweets are proof ??

How have Republicans mistreated farmers in the last 40 years ??

Someone who supports reigning in China's unfair trade policies and theft of IP and doesn't mind enduring some economic pain in doing so is stupid ?? How many US jobs have been lost by the Chinese stealing ~ $300B of IP every year for the last two decades ??

s002wjh · May 21, 2019

AFM said: ↑

And yet he did winning a deal in Canada and Mexico whilst negotiations continue with China and the EU.
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did he? I look the deal its almost identical.

AFM · May 21, 2019

s002wjh said: ↑

did he? I look the deal its almost identical.
Click to expand...

What's different about it ??

Mr_Truth · May 21, 2019

AFM said: ↑

Tweets are proof ??

How have Republicans mistreated farmers in the last 40 years ??

Someone who supports reigning in China's unfair trade policies and theft of IP and doesn't mind enduring some economic pain in doing so is stupid ?? How many US jobs have been lost by the Chinese stealing ~ $300B of IP every year for the last two decades ??
Click to expand...

Hint: Farmer's Aid concert, 1985.

AFM · May 21, 2019

Mr_Truth said: ↑

Hint: Farmer's Aid concert, 1985.
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So you have nothing.

Doofenshmirtz · May 21, 2019

rcfoolinca288 said: ↑

Perhaps you want to tell those farmers who are suffering exactly that.
Click to expand...

Do you have an argument to support leaving things as they were? Their suffering is being mitigated by subsidies. This is already common practice; why haven't you had an issue with farm subsidies until now? Is it because Trump is ba'ad?

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