Back in the saddle after a June heart attack, White House economic adviser Larry Kudlow told CBS This Morning on Wednesday that a planned $12 billion stimulus package for US farmers hurt by a growing trade dispute is a short-term solution and does not portend the Trump administration making a habit of aid programs.
“What we’ve put on the board is what I think is a temporary assistance measure, I don’t think it’s going to get near to $12 billion,” said Kudlow. “Nobody’s really thrilled about this. We’re just trying to protect American agriculture from some of the unfair trading practices.”
Kudlow said the attempt to shore up markets is a reaction to a “broken” system of world trade that has worked against the U.S. in the past. He called for patience in allowing the U.S. to achieve reciprocity in trade. –Bloomberg
“No one is thrilled with subsidies, I get that,” Kudlow said. “On the other hand, we need a backstop for our patriotic farmers who have been hurt.”
Some Congressional GOP panned the plan, saying it failed to address the underlying issues of the White House’s brewing trade wars.
Extra farm aid would be a balm to producers who are seeing prices drop and inventories rise because of disputes with China, Canada and other trade partners who are significant purchasers of U.S. pork, soybeans and other products.
While the overall economic impact of tariffs on steel and aluminum and Chinese imports already implemented by President Donald Trump is expected to be muted, American industry has warned it could hurt their earnings and lead to higher prices for consumers. On Wednesday, General Motors Co. cut its profit forecast this year on surging metals prices. –Bloomberg
That said, extra farm aid would help producers of targeted goods, such as pork, soybeans and other crops.
Automakers such as GM want Trump to ditch plans for 20% tariffs on vehicle imports on national security grounds, while European leaders will be meeting with Trump on Wednesday in a last-ditch effort to dissuade him from the plan.
European Commission President Jean-Claude Juncker and EU Trade Commissioner Cecilia Malmstrom plan to signal the bloc’s willingness to negotiate a bilateral trade agreement with the U.S. on manufactured goods, or a so-called plurilateral sectoral agreement between all major car exporters, which would cut or eliminate tariffs on automobiles globally. Still, Europe has prepared $20 billion in retaliatory measures if Trump follows through with his threat. –Bloomberg
Trump addressed his critics on trade Wednesday, Tweeting “When you have people snipping at your heels during a negotiation, it will only take longer to make a deal, and the deal will never be as good as it could have been with unity,” adding “Negotiations are going really well, be cool. The end result will be worth it!”
When you have people snipping at your heels during a negotiation, it will only take longer to make a deal, and the deal will never be as good as it could have been with unity. Negotiations are going really well, be cool. The end result will be worth it!
— Donald J. Trump (@realDonaldTrump) July 25, 2018
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