Tag Archives: President Trump

WASHINGTON (AP) — President Donald Trump has approved a disaster declaration covering more than half of the Kansas’ 105 counties.

The federal assistance approved Thursday will provide service and funds to help recovery from severe weather that began on April 28 and included tornadoes and flooding.

The declaration provides funding for emergency work, repair and replacement of damaged facilities and mitigation of hazards.

Kansas received 10.26 inches of rain in May, more than double the 30-year average of 4.12 inches.

And an EF-4 tornado that hit May 28 caused substantial damage in parts of Douglas and Leavenworth counties.

Prime Minister Justin Trudeau and U.S. President Donald Trump are to discuss continental trade and their shared challenges with China in a meeting in Washington next week.

The Prime Minister’s Office says the leaders will use next Thursday’s meeting to talk about the ratification of the new North American trade agreement and outstanding trade disputes between Canada and the United States.

The meeting will also give Trudeau and Trump an opportunity to discuss strategy ahead of the G20 leaders’ summit in Japan at the end of the month, which will give them face time with Chinese President Xi Jinping.

Trudeau and Trump will also talk about two Canadians detained in China for the last six months.

In December, China detained Michael Kovrig and Michael Spavor in apparent retaliation for the RCMP’s arrest of a Chinese high-tech executive on a U.S. extradition warrant.

Canada is caught between its two biggest trading partners on that issue, with Trudeau insisting Canada has to follow the rule of law but having no luck pressing the case with China’s leaders.

Besides the Kovrig and Spavor cases, China has obstructed shipments of Canadian agriculture products such as canola and pork, claiming that they’re ridden with pests or have labelling problems. On Thursday the government promised that Export Development Canada will put up $150 million in additional insurance backing for canola farmers looking to sell in new markets.

U.S. Vice-President Mike Pence has said Trump will press Xi to release Kovrig and Spavor and will link the plight of the two Canadians to broader trade talks between Washington and Beijing. Global Affairs Canada says Spavor received his eighth consular visit from Canadian diplomats on Thursday, one day after Kovrig’s latest visit.

While Trudeau and Trump have crossed paths at various international events in the last year, and had several telephone conversations, this will be their first substantive meeting since the U.S. president insulted the prime minister a little over a year ago after departing the G7 in Quebec.

The two leaders have continued to engage because both governments needed to wrestle a conclusion out of the often acrimonious renegotiation of the North American Free Trade Agreement, which Trump forced on Canada and Mexico.

Now, with the recent removal of U.S. tariffs on Canadian and Mexican steel and aluminum imports, there is renewed momentum to ratify the new trade pact.

Mexico’s Senate is expected to give its final legal approval to the new deal next week, but a delicate political dance continues between Ottawa and Washington over ratification. Trudeau has tabled the government’s ratification bill and it is winding its way through Parliament — slowly — ahead of next week’s adjournment of the House of Commons.

Canadian government sources have said the House could be recalled after its summer recess, in a last session before the October federal election, to deal with ratifying the new NAFTA if the U.S. Congress doesn’t deal with the matter promptly. As much as the government wants to move “in tandem” with the U.S. toward final approval of the new agreement, it doesn’t want to get too far ahead.

Some Democrats in the House of Representatives are less enthusiastic about the new deal, and some would like to deny Trump a trade victory. Some Democrats have said they want to see stronger provisions on labour and environmental standards in Mexico but that country’s lawmakers have approved a new labour-reform law that has won plaudits in Ottawa and among many other lawmakers in Washington.

Foreign Affairs Minister Chrystia Freeland concluded a two-day visit to Washington on Thursday, meeting two leading Republican and Democratic senators. A day earlier, Freeland discussed trade with U.S. trade czar Robert Lighthizer and China with Secretary of State Mike Pompeo.

LINCOLN, NEB. – “President Trump’s signing of the disaster assistance bill is tremendous news and an important step forward in helping Nebraska farm and ranch families and our rural communities recover from the March flooding and blizzards in our state.”

“This disaster bill includes roughly $3 billion to cover crop damage, including additional funding for farmers prevented from planting due to the floods, as well as payments for on-farm stored grain that was damaged in these flooding events. The bill also provides $558 million in funding for the Emergency Conservation Program, the primary program farmers and ranchers can utilize for fence repair and debris removal, including clearing sand from farm fields.”

“We want to thank the entire Nebraska Congressional delegation for their support for the disaster assistance package and for President Trump signing this package into law.”

“We urge USDA to move forward as quickly as possible in developing the rules and implementing the key programs so they can be put to work in helping Nebraskans.”

The National Pork Producers responded to President Trump’s plan to impose a five percent tariff on all Mexican imports by June 10. NPPC President David Herring appealed to Trump to reconsider his plans to open a new trade dispute with Mexico. “American pork producers cannot afford retaliatory tariffs from its largest export market which Mexico will surely implement,” he says. “Over the last year, trade disputes with Mexico and China have cost hard-working U.S. pork producers and their families about $2.5 billion.”

Herring is asking Washington to move forward with ratification of the U.S.-Mexico-Canada trade agreement and preserve zero-tariff pork trade in North America for the long term. “We’re also asking for a trade agreement with Japan,” he says, “as well as a resolution to the trade dispute with China. U.S. pork has a historic opportunity to make inroads into the Chinese market as the country continues to struggle with the African Swine Fever outbreak.” For most of the past year, American pork farmers have lost about $12 per hog due to trade retaliation by Mexico, which recently lifted the retaliatory tariffs last week.

Those numbers come directly from Iowa State University Economist Dermot Hayes, who says U.S. pork producers will lose the entire Mexican market if they face protracted retaliation. Mexico brought in 20 percent of total U.S. pork exports last year.

President Trump announced his intention to impose a five percent tariff on Mexican imports because of illegal immigration. He vows to keep those tariffs in place until Mexico stops illegal immigrants from entering the U.S. through the southern border.

The proposed move will take effect on June 10 and doesn’t give Mexico a lot of time to react to it. Trump says the levy “would gradually increase until the illegal immigration problem is remedied, at which time the tariff will be removed.” The tariffs could potentially go as high as 25 percent by October 1. The move comes just days after Trump removed the tariffs on steel and aluminum imports that caused direct retaliation against U.S. farm goods. Economists are warning that the move could be extremely negative for both countries.

Bloomberg describes the initial reaction from Mexican officials as “measured.” Mexican President Obrador said in a letter to Trump on Twitter that he “doesn’t want confrontation.” Mexico’s foreign minister and other officials were scheduled to visit Washington D.C. last week in order to come to an agreement.

Mexico’s undersecretary for foreign relations for North America told reporters that Mexico wouldn’t retaliate before discussing the matter with the U.S. However, if Trump follows through on the threat, the undersecretary says that “would be a very serious matter.”

(THE CONVERSATION) Soybeans may not seem all that useful in a war. Nonetheless they’ve become China’s most important weapon in its ever-worsening trade conflict with the U.S.

China, the world’s biggest buyer of the crop, has reportedly stopped purchasing any American soybeans in retaliation for the Trump administration raising tariffs on US$250 billion of Chinese goods. This is very bad news for U.S. farmers.

While China’s targeting of soybeans may have come as something of a surprise to most Americans, to a professor of agricultural economics who studies international commodity markets for a living, this was not at all unexpected.

Even before the conclusion of the 2016 presidential race, trade analysts were already weighing the possibility that China might impose an embargo on U.S. soybean imports based on protectionist rhetoric from both candidates.

As a result, with the trade war in full swing, American soybean farmers are now among its biggest losers. Here are a few figures that show why.

Soybeans, by the numbers

Soybeans are a crucial part of the global food chain, particularly as a source of protein in the production of hogs and poultry.

The importance of China as a market for soybeans has been driven by an explosion in demand for meat as consumers switch from a diet dominated by rice to one where pork, poultry and beef play an important part. Chinese production of meat from those three animals surged 250% from 1986 to 2012 and is projected to increase another 30% by the end of the current decade. However, China is unable to produce enough animal feed itself, hence the need to import soybeans from the United States and Brazil.

In 2017, the U.S. accounted for $21.4 billion worth of global soybean exports, the second largest after its main competitor Brazil, which exported $25.7 billion.

Meanwhile, in 2017 China accounted for the lion’s share of global soybean imports at $39.6 billion, or two-thirds of the total.

Back in 2017, that was good news for American farmers, when U.S. exports made up about a third of Chinese purchases, or $13.9 billion. That made soybeans the United States’ second-most valuable export to China after airplanes.

But U.S. exports to China have fallen dramatically since China slapped a 25% tariff on Americans soybeans last April as part of its initial response to President Donald Trump’s trade war.

In the current farm marketing year, which began Sept. 1, U.S. farmers have exported just 5.9 million metric tons of soybeans to China, compared with an average of 29 million at the same point during the previous three years – or about 80% less.

That’s why the tariffs have tremendous potential to hurt farmers in my state of Ohio, where soybeans were the number one agricultural export in 2017 at $1.3 billion. China is the state’s largest export market.

And yet nationally, Ohio is just the seventh-largest exporter of soybeans, after Illinois, Iowa, Minnesota, Nebraska, Indiana and Missouri, all of which are suffering from the tariffs.

Not only do farmers stand to lose out by giving up market share to Brazilian farmers, but soybean prices at the port of New Orleans have fallen as well and are currently $9.35 a bushel compared with $10.82 per bushel a year ago. This has hurt incomes and created a double whammy for Midwest farms.

This is of course why the Chinese chose to place a tariff on U.S. soybeans in the first place. Farmers will hurt a lot, and soybeans are produced in states where many of them voted for Donald Trump. China’s hope, presumably, is that farmers will lobby the administration to step back from further escalation of the trade war.

That seems unlikely, given the $28 billion in aid the Trump administration is offering farmers to soften the blow and the possibility of higher tariffs on an additional $325 billion worth of Chinese imports. At this point it looks like both sides are hunkering down for a prolonged trade war.

This is an updated version of an article original published on April 5, 2018.

This article is republished from The Conversation under a Creative Commons license. Read the original article here: http://theconversation.com/how-soybeans-became-chinas-most-powerful-weapon-in-trumps-trade-war-118088.

Despite pushback from U.S. business and Mexico, President Donald Trump doubled down Friday on his threat to slap a 5% tariff on Mexican imports unless America’s southern neighbor cracks down on Central American migrants trying to cross the U.S. border.

U.S. manufacturers said the tariff, set to take effect June 10, would have devastating consequences on them and American consumers. U.S. stocks tumbled on Wall Street in response to Trump’s planned action.

“Imposing tariffs on goods from Mexico is exactly the wrong move,” said Neil Bradley, executive vice president of the U.S. Chamber of Commerce, which is exploring legal action in response to the tariffs. “These tariffs will be paid by American families and businesses without doing a thing to solve the very real problems at the border. Instead, Congress and the president need to work together to address the serious problems at the border.”

Mexican President Andrés Manuel López Obrador dispatched his foreign secretary to Washington to try to negotiate a solution. He said social problems are not solved with coercive measures, but also seemed convinced that Trump just needed to be informed about all the steps Mexico has taken to slow illegal migration.

Mexico has stepped up raids on migrant caravans traveling through the southern states of Chiapas and Oaxaca this year. It has deported thousands of migrants and frustrated thousands more who wait endlessly for permits that would allow them to travel legally through Mexico.

Administration officials told reporters in a briefing call Thursday evening that Mexico could prevent the tariffs from kicking in by securing its southern border with Guatemala, cracking down on criminal smuggling organizations, and entering into a “safe third country agreement” that would make it difficult for those who enter Mexico from other countries to claim asylum in the U.S.

“We fully believe they have the ability to stop people coming in from their southern border and if they’re able to do that, these tariffs will either not go into place or will be removed after they go into place,” said acting White House chief of staff Mick Mulvaney.

Trump said the percentage will gradually increase — up to 25% — until the migration problem is remedied.

“Mexico has taken advantage of the United States for decades,” Trump said in a tweet. “Because of the Dems, our Immigration Laws are BAD. Mexico makes a FORTUNE from the U.S., have for decades, they can easily fix this problem. Time for them to finally do what must be done!”

Trump’s decision showed the administration going to new lengths, and looking for new levers, to pressure Mexico to take action — even if those risk upending other policy priorities, like the United States-Mexico-Canada Agreement, a trade deal that is the cornerstone of Trump’s legislative agenda and seen as beneficial to his reelection effort.

Keeping the economy rolling also is critical to Trump’s reelection, and business was not happy with the president’s planned tariff on Mexican imports.

“These proposed tariffs would have devastating consequences on manufacturers in America and on American consumers,” said Jay Timmons, chief executive officer of the National Association of Manufacturers. “We have taken our concerns to the highest levels of the administration and strongly urge them to consider carefully the impact of this action on working families across this country.”

The stock market’s tumble on Friday all but guarantees that May will be the first monthly loss for the market in 2019. The news hit automakers particularly hard. Many of them import vehicles into the U.S. from Mexico.

“The auto sector – and the 10 million jobs it supports – relies upon the North American supply chain and cross border commerce to remain globally competitive,” said the Auto Alliance, which represents automakers that built 70% of all cars and light trucks sold in U.S. “Any barrier to the flow of commerce across the U.S.-Mexico border will have a cascading effect — harming U.S. consumers, threatening American jobs and investment and curtailing economic progress.”

The response from Trump’s GOP allies on Capitol Hill was notably muted. Republicans have expressed unease with Trump’s trade and tariff wars and tried to reverse some of them.

“There is a serious humanitarian crisis at our southern border, and it is past time for my Democratic colleagues to finally get serious about meaningful action,” Senate Majority Leader Mitch McConnell said.

But the sudden tariff threat comes at a peculiar time, given how hard the administration has been pushing for passage of the USMCA, which would update the North American Free Trade Agreement.

Sen. Chuck Grassley, R-Iowa, a usual Trump ally and the chairman of the Senate Finance Committee, slammed the president’s action as a “a misuse of presidential tariff authority” that would burden American consumers and “seriously jeopardize passage of USMCA.”

Sen. Joni Ernst, R-Iowa, said the livelihoods of farmers and producers from her state are at risk and so is the USMCA.

“The USMCA would provide much-needed certainty to our agriculture community, at a time when they need it,” she said. “If the president goes through with this, I’m afraid progress to get this trade agreement across the finish line will be stifled.”

This spring’s planting decisions may be as clear as mud, yet they carry heavy financial consequences.

“You couldn’t have planned this to be more confusing,” said University of Illinois economist Gary Schnitkey. “The falling out of the trade deal happened right when we were getting to the point of planting corn.”

Then, persistent heavy rains across wide swaths of the Corn Belt kept farmers from their fields, forcing many producers to weigh their options: take a prevented planting payment from crop insurance, plant corn but with lower insurance coverage levels or switch to soybeans.

“So it just becomes a point of looking for the alternative that you think has the highest expected return, even though it’s probably not the return that you’d like,” he said. Many farmers will still be looking at negative incomes as they put pen to paper.

VARIOUS FACTORS

Farmers have to factor in their local weather forecast, fluctuating markets and USDA’s revised Market Facilitation Program. USDA released its proposal on Thursday afternoon — $14.5 billion of direct payments to farmers with a rate based on county-level trade impacts and the total acreage a farmer plants to eligible commodity crops.

“They’ve tried to structure it in a way that doesn’t necessarily favor switching to soybeans sooner, which is what a lot of people were worried about, but it does suggest that people who get toward the end of that (soybean) planting window might wind up stretching it a little farther,” Jim Mintert, director of the Center for Commercial Agriculture at Purdue University, said in a webinar.

While that program could help lift farmers’ bottom lines, USDA hasn’t released payment rates, which it says will be based on trade losses at the county level. (For more details on how the program would work, please read https://www.dtnpf.com/….)

“USDA is going to have to provide some clarification as far as how those payments are going to be computed, but if our interpretation is on track, it’s going to discourage prevented planting,” Mintert said.

DEPENDS ON LOCATION

Determining whether it’s worth it to continue planting corn after the final planting date, which is sometime between May 25 and June 5 depending on where you are in the Corn Belt, is complicated.

Farmers have to consider whether they’ll have a window to plant, what they may be giving up in yield, changes to their insurance protection levels and whether they believe they’ll be able to sell the crop at a profit. Many of those are still moving targets.

Robert Nielsen, Purdue Extension agronomist and corn specialist, said planting date is only one factor in determining yields. After about the middle of May, corn yields decline approximately 1 to 2 bushels per acre per day. So, if you plant corn on June 10, you’re looking at a yield loss of about 30 to 60 bushels per acre.

“That still doesn’t tell us what the actual yield will be at the end of the season,” he said on the webinar. For example, if the rest of the season turns out perfectly, yield potential could have been 260 bushels per acre. Subtract 60 bushels because you planted late, and you’re still looking at a 200 bpa yield. But if the rest of the summer has poor growing conditions, that topline yield could fall to 200 bpa, leaving you with a yield of 140 bpa.

“I accept the fact that we lose yield as we delay planting, but that doesn’t tell me what the actual yield will be at the end of the season, and so we’re playing these what-if scenarios trying to budget in numbers that require yields, not loss. It’s really what’s going to happen the remainder of the season that’s going to dictate the actual absolute yield,” Nielsen said.

TOUGH DECISION

Michael Langemeier, associate director at Purdue’s Center for Commercial Agriculture, said he thinks there’s a danger farmers could pull the plug on corn planting too soon because they’re wary of the yield impact. “If the yield drops are not very big, corn does look like it’s more profitable and has less downside risk than soybeans. It’s a tough decision this year.”

DTN Lead Analyst Todd Hultman concurs that there’s more profit potential in corn this year, even though the marketing year got off to an unusual start. Noncommercial traders made record-large bearish bets early in the season based on the size of Brazil’s and Argentina’s crops. That pushed prices down this spring, limiting farmers’ pricing opportunities.

“So, for a while, it looked like the seasonal pattern in corn wasn’t really forming up, and that actually happens, maybe, one out of four years,” Hultman said. “When it does, we usually see a seasonal peak come later in the year than it normally does.”

Now, with the wet spring and inability to plant corn in May, those noncommercials are being forced to cover their positions, putting the market in a bullish situation. Hultman said it’s tough to guess how high the market will go.

“The planting problem is for real. It’s not because it’s exaggerated by anybody yet,” he said. “The noncommercials being that heavily short just adds fuel to the fire. I think we can continue to bet on higher corn price.”

MARKETING UPSIDE

Mintert said the upside from a marketing standpoint is “clearly on the corn side because it looks like we’re going to pull some acres away from corn, maybe tighten up the supply a little bit. On the soybean side, the failure to negotiate the trade agreement with China is huge.”

The 2018-19 stocks-to-use ratio for soybeans, at 25%, is the highest it’s been since the 1980s.

“If we chart ending stocks-to-use ratios compared to where they have typically traded in the past, we’re talking about cash soybean prices with a $6 in front of them,” Hultman said. “The bearish potential for this situation we’re in is clear and very hard to argue. Why would anybody plant soybeans in that situation? But if they can be assured of getting a bonus check, that certainly might help them.”

Hultman has recommended DTN customers establish a price floor under their 2019 soybean production by buying out-of-the-money puts. A put option allows the owner the right, but not the obligation, to sell the underlying commodity at a set price. When he initially made the recommendation, those options were less than a nickel per bushel. Despite that option price more than doubling to date, Hultman says there is still potential in the strategy.

“This year, I don’t think we can say it’s really a bad price yet because of the potential downside risk.”

For farmers looking to cash in on the corn market’s rally, Hultman suggests a mix of old-crop and new-crop sales. He’s recommended farmers price up to 25% of new-crop corn, being careful not to overestimate their production potential. For old-crop sales, he suggests pricing another 25%.

“That can certainly help boost their cash position, and if we get a little more here in the next few weeks, that would help a lot too,” Hultman said. He suggests feeding this rally, instead of trying to catch the top.

“The big picture for grains in general is still extremely bearish, especially with record wheat supplies and the ending stock numbers we’re talking about for beans. It seems like a real gift to get some better corn prices, so we want to take advantage of it.”

DEFENDING AMERICAN FARMERS: President Donald J. Trump is defending American farmers from unjustified trade retaliation.  

  • President Trump has authorized the Department of Agriculture (USDA) to provide up to $16 billion in trade mitigation programs to support our farmers.
    • This funding is in line with the estimated impact of China’s unjustified trade retaliation.
  • $14.5 billion will go to direct payments to producers through the Market Facilitation Program.
    • These payments will be made available in three allocations, as needed.
  • The first payments will be made in July, and additional payments will follow in November 2019 and January 2020 if warranted.
  • $1.4 billion will go to the Food Purchase and Distribution Program to purchase surplus commodities affected by trade retaliation.
    • These products will then be distributed to schools, food banks, and other groups.
  • $100 million will go to developing new export markets for American producers through the Agricultural Trade Promotion Program.
  • These programs will help support American farmers and give President Trump additional time to work toward a long-term trade deal that works for our country.
    • Reaching a fair, long-term trade deal with China will be a win for American agriculture.
EXPANDING AGRICULTURAL EXPORTS: President Trump is negotiating fair, free, and reciprocal trade deals that remove barriers and open up markets for American farmers.
  • President Trump negotiated the United States-Mexico-Canada Agreement (USMCA), getting a better deal for American farmers and ranchers.
    • USMCA eliminates Canada’s discriminatory programs that allow low-priced dairy products to undersell American dairy producers.
    • USMCA includes expanded market access for dairy products, eggs, and poultry.
  • The President reached a deal with the European Union to increase American soybean exports.
  • President Trump has successfully negotiated to remove barriers on American agricultural products, including recently opening Japan’s market to all American beef.
    • Restrictions have also been lifted on American pork exports to Argentina, beef to Brazil, Idaho chipping potatoes to Japan, poultry to South Korea, and more.
PRODUCING RESULTS FOR FARMERS: President Trump and his Administration are working every day to deliver for American farmers.
  • The President signed the farm bill last year, which extends farm support programs, improves crop insurance, promotes agricultural exports, maintains disaster programs, and more.
  • President Trump is rolling back red tape that harmed American farmers, such as the previous administration’s burdensome Waters of the United States rule.
  • The President’s tax cuts and reforms helped save family farmers from the unfair estate tax.
  • President Trump provided a boost to America’s corn-growing communities by directing his Administration to allow the sale of E15 gasoline year round.
  • The Trump Administration is promoting connectivity in rural America to help communities and agricultural producers to continue to grow and innovate.

The Trump administration today announced plans to lift the 25% tariff on steel and the 10% duty on aluminum imports imposed last year on Canada and Mexico. Both countries subsequently retaliated against a host of U.S. products.

“We thank the administration for ending a trade dispute that has placed enormous financial strain on American pork producers,” said David Herring, a pork producer from Lillington, N.C., and president of the National Pork Producers Council. “Mexico’s 20% retaliatory tariff on U.S. pork has cost our producers $12 per animal, or $1.5 billion on an annualized, industry-wide basis. Removing the metal tariffs restores zero-tariff trade to U.S. pork’s largest export market and allows NPPC to focus more resources on working toward ratification of the U.S.-Mexico-Canada Agreement (USMCA), which preserves zero-tariff trade for U.S. pork in North America.”

Last year, Canada and Mexico took over 40% of the pork that was exported from the United States. NPPC has designated USMCA ratification as a “key vote” and will closely monitor support of the agreement among members of Congress. U.S. pork exports to Mexico and Canada support 16,000 U.S. jobs.

“We are also hopeful that the end of this dispute allows more focus on the quick completion of a trade deal with Japan,” Herring added. “U.S. pork is losing market in its largest value market to international competitors that have recently implemented new trade agreements with Japan.”

According to Dr. Dermot Hayes, an economist at Iowa State University, U.S. pork will see exports to Japan grow from $1.6 billion in 2018 to more than $2.2 billion over the next 15 years if the U.S. quickly gains access on par with international competitors. Hayes reports that U.S. pork shipments to Japan will drop to $349 million if a trade deal on these terms is not quickly reached with Japan.