President Trump’s efforts to calm investors while he launches a full-scale trade war with China showed signs of cracking this morning, as one of his top advisers admitted the approach could damage the U.S. economy, a Goldman Sachs report predicted it might lead to higher interest rates, and China vowed to impose tariffs on $60 billion in U.S. goods on June 1.
Here’s where we are at:
- Beijing has announced retaliatory tariffs on $60 billion in U.S. goods: “China will never succumb to foreign pressure,” says Foreign Ministry spokesman.
- Dow has plunged 556 points as of now (10:50 a.m.) since the market open as investors price fallout of trade tensions.
- In tweets this morning, Trump insisted his tariffs on $200 billion in Chinese imports won’t hurt American consumers, contradicting recent comments from National Economic Council Director Larry Kudlow.
Trump’s posts contained typos and misspellings, suggesting that his comments had not been thoroughly vetted by White House officials and might not represent fully planned-out policy initiatives.
The fact of the matter is… US consumers DO pay when you raise tariffs on China. And this trade war with China hurts the economy overall:
Also hurt? Midwest farmers:
Trump is generally popular in the rural Midwest. He carried all but two Midwestern states in 2016, won more than 90 percent of the vote in some agrarian counties and has been praised for rolling back environmental regulations. But Mr. Trump’s propensity for imposing tariffs has clashed with the free-trade instincts of the region’s farmers, who have watched lucrative overseas markets for soybeans and other crops shrivel. For some Midwestern Republicans in Congress, the use of tariffs has been a rare point of disagreement with President Trump.
Jolene Riessen, who farms near Ida Grove, Iowa, said she remained hopeful that a trade deal would be reached, but she said that the drawn-out negotiations had already hurt her business.
“I would just say, ‘Get something done, move ahead, get something done,’” said Ms. Riessen, 58. “The uncertainty is killer for us out here.”
Ms. Riessen said she scaled down her cattle operation, partly because of the trade war, and delayed selling some of her soybean crop from last year. She said she remains worried about making new investments in her farm.
A major concern for soybeans farmers, for one, is that they’re losing global market share the longer this trade war goes on. U.S. farmers spent decades developing this market.
Trump is seeking an additional $15 billion in U.S. subsidies in an effort to protect farmers from the devastating impact of his trade war with China. That’s on top of $12 billion already earmarked for the farmers to help them weather the fallout.
That would be an additional bill for U.S. taxpayers already shouldering the cost of increased tariffs in the form of higher costs for products and parts from China.
Trump is going to have cheat really hard in 2020.
Bouncing back, but still not good….
But down again…
CHART OF THE DAY: After #China retaliates on U.S. trade war, #soybean prices fall to close to the low point of the 2008-09 global financial crisis. American soybean farmers getting today the same price they got in 1981 | #OATT @TheTerminal #TradeWars pic.twitter.com/FxvhPqkE3F— Javier Blas (@JavierBlas) May 13, 2019
Trump said:— West Wing Reports (@WestWingReport) May 13, 2019
1) Mexico would pay for wall
2) China would pay for tariffs
3) he would eliminate the entire national debt (now projected to be $22 trillion by 2027)
…in fact, you are paying for all of the above
Closed down 617.38 points.