Trump Attempts to Talk Down Trade War as Farm Belt Anger Rises

Trump says US and China will remain friends and China will take down trade barriers because it's the right thing to do.

Farm belt politicians don't see things the same way: Anger Over Trump Tariffs Puts Republican Candidates in a Bind.

In North Dakota, a major soybean-producing state, Representative Kevin Cramer, a Republican who is running for the Senate, sounded restrained this past week when he urged Mr. Trump to “take a more measured approach” to China. By Friday, he sounded panicked.

“I contacted @SecretarySonny to urge him to use every tool in the Farm Bill, including Commodity Credit Corp programs, to protect ag producers from effects resulting in potential trade actions against China,” he wrote on Twitter, referring to Agriculture Secretary Sonny Perdue.

A trade war with China could be particularly devastating to rural economies, especially for pig farmers and soybean and corn growers. Nearly two-thirds of United States soybean exports go to China.

Iowa’s senators — Joni Ernst and Charles E. Grassley, both Republicans — have called on Mr. Trump to reconsider. In a statement, Ms. Ernst cited the “real danger that increased tariffs on U.S. exports will harm Iowa producers and undermine the rural economy,” and she said she had spoken directly with the president about it.

While some farmers and lawmakers have expressed hope that Mr. Trump’s threats are merely a negotiating tactic, administration officials insisted this past week that was not the case.

“There is the potential of a trade war,” Steven Mnuchin, the Treasury secretary, said in an interview with CNBC. “There is a level of risk that we could get into a trade war.”

“Trump is not just using tariffs as a negotiating card. He said that to me,” Mr. Kudlow told reporters on Friday.

Right Thing To Do

Supposedly, China will do the right thing, just because it's the right thing to do.

By that logic, the US would remove all tariffs and subsidies and China would do the same.

Yeah, right.

Mike "Mish" Shedlock

Comments (15)
No. 1-15
Rayner-Hilles
Rayner-Hilles

It was quite clever of China to go after the farmers, it hits all these key agricultural states like North Dakota; they clearly understand how the state electoral system works.

Allsfairthatendswell
Allsfairthatendswell

Just continue to run hugh trade deficits, right mish?

Carl_R
Carl_R

So long as the trade war is confined to the US and China, the effect will be less than expected. World production of soybeans remains constant, as does world demand for soybeans. If China buys less soybeans from the US, they will buy more from someone else, perhaps Brazil. That, in turn, will mean Brazil sells less soybeans to someone else, perhaps Japan. That, in turn will mean that Japan buys more soybeans from the US, and it's a wash. Longer term, of course, Brazil could increase production of soybeans, and take a larger market share, but in the short run the effect will not be all that great.