Ag Policy Blog

Talks between the United States and China over trade ended Friday without resolution and no scheduled future meetings, as President Donald Trump increased tariffs on Chinese products.

While House Agriculture Committee Chairman Collin Peterson, D-Minn., and farm leaders criticized the additional tariffs, Trump said the government would buy more farm products for food aid, and Vice President Mike Pence and Senate Agriculture Appropriations Committee Chairman John Hoeven, R-N.D., said more aid to farmers may be needed.

“President Trump tweeted that the talks were ‘candid and constructive,’ but in the meantime 25% tariffs on $200 billion worth of Chinese goods that took effect this morning will remain in place,” Washington Trade Daily reported.

Those tariffs “'may or may not be removed depending on what happens with respect to future negotiations!,'” Trump also tweeted, WTD added.

Trump also tweeted, “Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch! In the meantime, China should not renegotiate deals with the U.S. at the last minute."

The president wrote in another tweet, “Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind. Also, much easier & quicker to do. Our Farmers will do better, faster, and starving nations can now be helped. Waivers on some products will be granted, or go to new source!.”

“With the over $100 billion in tariffs that we take in, we will buy agricultural products from our great farmers in larger amounts than China ever did and ship it to poor and starving countries in the form of humanitarian assistance,” Trump tweeted.

“In the meantime, we will continue to negotiate with China in the hopes that they do not again try to redo deal. Our farmers will do better, faster and starving nations can now be helped,” he said.

The White House also released a series of statements from officials and others supporting the president’s tough stand on China.

Agriculture Secretary Sonny Perdue has discouraged talk of another aid package in 2019, but today Perdue tweeted that the White House had directed USDA to work on a new aid package.

“In Japan for ag discussions with our 4th largest ag customer,” Perdue wrote.

“Just spoke with @POTUS — while China may backtrack, @POTUS is steadfast in his support for U.S. farmers and directed @USDA to work on a plan quickly. @POTUS loves his farmers and will not let them down!”

Peterson said, “The Trump administration’s decision to once again raise tariffs on Chinese goods does nothing but use our farmers as political pawns and further ourselves from a real solution.”

“While I understand that the president believes he has good intentions on this, he’s doing it without understanding the impacts this has on farmers and our rural communities,” Peterson said. “Farmers don’t set the prices they receive, and every action causes a reaction in the market, leaving them subject to every word uttered or tweet sent.”

“As the margins have tightened in rural America, we’ve heard those same farmers sound the alarm bells over and over again, and now they’re bracing for even more bad market news. With the upcoming negotiations set to take place, I hope that we can bring an end to this,” Peterson said.

Vice President Mike Pence, who visited Minnesota on Thursday, said the administration is considering aid to farmers beyond the Market Facilitation Payments already made, Politico reported.

“Make no mistake about it: We have already had preliminary discussions in the White House for additional support for farmers if this impasse with China continues,” Pence said during a visit to a farm in Glyndon, Minn., in Peterson's district.

“You can be very confident that President Trump and I and our entire administration are going to look for ways to provide additional support to American farmers that would be impacted by the negotiations or uncertainty in our relationship with China,” Pence added during a trip in which he mostly promoted the proposed U.S.-Mexico-Canada Agreement’s impact on the steel industry.

Today Hoeven said he has been urging the administration to issue another round of MFP payments.

“With the Chinese continuing to delay negotiations, farm country needs assistance which is the case I’ve been making to the administration, both at USDA and the White House," Hoeven said.

"I am encouraged that the president has said we should make more assistance available to our farmers during trade negotiations. I continue to advocate for another round of Market Facilitation Program payments, and other agriculture assistance.

“Our agriculture producers have been targeted by the Chinese, which is why it makes sense to put the tariff money that comes in toward providing aid, including another round of MFP and other trade assistance, for producers. That will send a clear message to China that the U.S. will do what it takes to prevail and get a better trade deal,” Hoeven said.

Leaders of the National Association of Wheat Growers, the American Soybean Association and the National Corn Growers Association all said Friday that the additional tariffs will make things worse for farmers.

Meanwhile, Axios reported that the lack of resolution to the talks will cause the broader business community to reevaluate the situation.

“Having long priced in a happy ending to the trade war, the market will need to reassess U.S. businesses and the state of the U.S. economy. Further, supply chains may need to be rethought and entire businesses may have to be re-evaluated,” Axios said.

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow him on Twitter @hagstromreport

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