Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.Appropriators Urged to Thwart USDA Moving ERS, NIFA From DC
Critics of USDA’s plans to relocate two research agencies out of D.C. next year are urging a special provision in an upcoming spending bill to put the moves on hold.
USDA Secretary Sonny Perdue has proposed relocating the Economic Research Service and National Institute of Food and Agriculture.
"This delay is necessary in order for Congress and stakeholders to understand the problems USDA seeks to address and the ramifications of the USDA’s proposed moves," a collation of 60 groups, including the National Sustainable Agriculture Coalition, Agricultural & Applied Economics Association, and the Consumer Federation of America, said in a letter.
Nearly 140 cities are interested in hosting ERS and NIFA, according to a list of applicants published by USDA. The department plans to pick a new location or locations for the agencies by January 2019.
Meanwhile, USDA’s Inspector General is currently reviewing whether the department has the authority to move the agencies and if proper procedures were followed.
Trump, Lighthizer Remain Key In China Situation
While the White House's National Economic Council is reviewing what offers on agricultural tariffs, technology transfer, cyber security and intellectual property protection would be acceptable relative to the U.S.-China situation, other sources indicate such items can only be addressed by President Donald Trump and U.S. Trade Representative Robert Lighthizer.
Lighthizer has been insisting tariffs need to continue to get China to make necessary concessions. Others have speculated that should Commerce Secretary Wilbur Ross exit the administration, it opens up potential for a less-aggressive stance by the administration.
However, veteran contacts discount such talk, noting Trump and Lighthizer are in agreement that existing and possibly additional tariffs on China will bring them to the negotiating table.
Washington Insider: Gloves Come Off in Trade Fight
The current fight over trade policy seems unusual because it is so strident. For example, China says it’s open to new talks—but it hastens to add that it “won’t be bullied by the U.S.” And last week, White House trade adviser Peter Navarro went so far as to warn “Wall Street bankers and hedge-fund managers to back down from their push for President Donald Trump to strike a quick trade deal with China’s Xi Jinping,” Bloomberg says.
Navarro did not pull punches. “As part of a Chinese government influence operation, these globalist billionaires are putting a full-court press on the White House in advance of the G-20 in Argentina,” he said on Friday. “Their mission is to pressure this president into some kind of deal but instead they’re weakening his negotiating position.” “No good can come of this,” he cautioned.
Navarro said investors should be re-directing their “billions” of dollars into helping rebuild areas hit by manufacturing job losses. “Wall Street, get out of those negotiations,” Navarro said. “Bring your Goldman Sachs money to Dayton, Ohio, and invest in America.”
Navarro didn’t offer details on how Wall Street bankers or investors are pressuring the White House. But his comments came two days after former Goldman Sachs Group Inc. president and ex-Trump economic adviser Gary Cohn took a thinly veiled shot at him saying that Trump had found “one economist on Amazon who thinks trade deficits matter, and he listens to him.”
U.S. stocks continued their decline on Friday following Navarro’s comments, which were seen as adding to the gloomy outlook created by disappointing earnings in the technology sector and concerns about a bear market in oil prices.
Cohn and Treasury Secretary Steven Mnuchin – another former Goldman Sachs executive – have diverged on trade policy from Navarro and ex-White House strategist Steve Bannon, who advocate a more confrontational approach toward China.
Henry Paulson, the former Treasury secretary and head of Goldman Sachs, this week also warned that the rising tensions between the U.S. and China risked creating a new "economic Iron Curtain" in the world. He said he himself was trying to help negotiate a detente.
“I am an American patriot. And so I find myself spending more time in China than my family would like precisely because it is in America’s interest to find a way to deal with this new and sometimes difficult China," Paulson told Bloomberg’s New Economy Forum in Singapore.
Trump is expected to discuss trade with Xi when they meet at the Group of 20 summit taking place later this month in Buenos Aires. While Trump has asked cabinet officials to outline the terms of a possible deal with Xi, Chinese officials have given no indication they’re ready to meet key U.S. demands, such as halting forced technology transfers or rolling back support for state-owned enterprises.
Navarro said simply buying more American soybeans and coal won’t satisfy the administration, which wants deeper “structural change” in the Chinese economy. He said trust in the Asian nation has deteriorated, with the White House doubting the ability of Beijing to follow through on its promises.
Last week, before congressional midterms, the President told a campaign rally in Fort Wayne, Indiana, that he still believed he and Xi could settle the dispute.
Earlier this week, Chinese Vice President Wang Qishan said China remained ready to discuss solutions to the trade war, though he added that Beijing wouldn’t be “bullied and oppressed by imperialist powers.”
Christopher Johnson, a China expert at CSIS, said Navarro’s comments appeared to reflect an intensifying internal debate within the Trump administration ahead of the G20 meeting with Xi.
Trump had signaled a number of times that he is eager to make a deal and yet hawks within the administration remain skeptical that the time is right for one and worry any ceasefire would lack the proper substance. “At some level I interpret Mr. Navarro’s comments here today as reflecting the concerns that some people have about the potential for a bad deal," Johnson said, saying Navarro appeared to be trying "to create a firebreak."
So, we will see. There appears to be strong sentiment throughout industry groups to find some way to lower the temperature in the trade fight and avoid the potential damage to global supply chains that now appears possible.
Certainly it seems unlikely that jawboning by belligerent administration officials will lead to better international policy. This is a high stakes fight and one producers should watch closely as the administration decides what it next steps will be, Washington Insider believes.
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