Posted on 07/26/2019 9:14:01 PM PDT by Berlin_Freeper
The U.S. government will pay American farmers hurt by the trade war with China between $15 and $150 per acre in an aid package totaling $16 billion, officials said on Thursday, with farmers in the South poised to see higher rates than in the Midwest.
(Excerpt) Read more at reuters.com ...
Its a bad thing its called corporate welfare
Your in favor of using of socialist corporate welfare subsidies as long as its a Republican doing it?
The article you linked states that tariffs have raised $20.8 billion so far.
This bailout for farmers, is described as “up to” $16 billion.
Also, tariffs continue to raise more money each month.
In May, larger tariffs were announced, which started to be collected in June. They more than double the monthly revenue.
Hogwash
“Hogwash”
Simple facts.
The article itself reports the $20.8 billion revenue, the President’s twitter ID’s the $16 billion.
25% tariffs on $200 billion in Chineses imports were announced in May - a big increase. I don’t see what you are disputing.
That’s just this round. The first round was $12B in July 2018.
Considering the Midwest fields got washed out. I wold expect there are losses.
Russia will become their big supplier.
....Expansion of soybean exports to China is constrained by infrastructure issues such as incompatible railway gauges, lack of road connections between the two countries and absence of grain sea terminals,” the report said....
https://www.agricensus.com/Article/Russian-soybean-production-to-increase-8-2-USDA-1389.html
Ping to 46.
Updating the farm bill is an annual event in Washington - since the Roosevelt Administration, even though the base bill runs for five years.
Farmers are routinely bailed out, when natural disasters strike, like this year’s flooding, or devastation from pests, diseases, drought or freeze - but also when trade issues impact them.
We spend about $100 billion a year on the Farm bill, routinely (most is for food stamps, but farm subsidies are consistently large).
From the article you linked, last year, up to $12 billion was set aside for farmers affected by trade issues, and $10 billion was actually spent - but 20.8 billion was collected since then on tariffs.
For the year ahead, up to $16 billion is available for farmers, but tariff revenue is on track to be several times as much by this time next year.
Besides steel and aluminum, tariffs did not even start being collected on China until the fourth quarter last year (2018), they bumped up significantly in January, and the much more significant rise occurred at the end of May (but did not include good already aboard ships, so effectively June).
$50 billion in new revenue is realistic estimate between now and next June - even without the really biggest tariff package (25% 0n $325 billion more of imports - up to $80 billion/year of additional revenue), that has already completed its comment period, and could be imposed by the President on a moment’s notice.
The Chinese have already done their worst on our agricultural products. Those numbers have little room left to grow.
We import more than 4 times the dollar value from China, than we export to them. If volumes remained the same (they will of course fall over time with tariffs), a 25% across the board tariff would be enough to buy every single thing we currently export to them, at full price.
Which we’re collecting from US consumers and businesses and redistributing to our farmers.
Our farmers don’t want this - they want the opportunity to sell their goods, not welfare.
(tariffs) “Which we’re collecting from US consumers and businesses and redistributing to our farmers.”
The economists at the EU estimate that China is absorbing about 80% of the tariffs, through discounting prices and currency devaluation.
“What was grown before soybeans?”
Oats & hay.
There was an analysis last year, based on the original tariffs, that made that claim, but that’s subject to dispute and really beside the point.
There’s no question that the $28B in relief to US farmers is coming from US taxpayers, not to mention the hundreds of millions in additional costs incurred by firms like Caterpillar and Deere.
The real question is what’s the benefit of these tariffs to us?
If we just want to hurt China, fine, but what’s in it for America?
Wow! Tariff revenue from China is going through the roof!
https://www.freerepublic.com/focus/f-chat/3768425/posts
The President just announced 10% on the remaining $300 billion of Chinese imports, starting September 1st. If the past is a good indicator, they will bump up to 25% the following quarter.
So the 25% on $200 billion starting in June, added to the 10% on $300 billion starting in September, would be an additional $80 billion/year in revenue.
Bottom line: Tariff revenues are going to outstrip payments to farmers by a very wide margin - probably fivefold.
Farmers are politically pampered snow flakes. I don't know why 2% of the working population holds so much political sway.
If only China paid the tariffs, which of course they don't.
It's just another $80B flowing to the federal government from US consumers, and when China retaliates it will almost certainly mean billions more in farmer bailouts.
We only exported about $20 billion/year of agricultural products to China in total.
Farmer payouts are already adequate to cover the full amount (most will find new markets).
China has already devalued their currency 10% to absorb the costs of the tariffs, and that hits all of their $500 billion of exports to the USA ($50 billion/year).
Additionally, price discounting has been steep by Chinese producers.
The results are already in - no significant price inflation was realized in the USA, and the Federal Reserve could go ahead and cut interest rates.
The theory of tariffs being paid by US consumers, assumes that there is that much of a difference in the sales price of the imported goods, from what is available domestically.
But in practice, other suppliers could compete closely with China on price.
Since these tariffs are only on China (not all foreign goods) the whole rest of the world can compete on price. They have. Prices for US consumers have not significantly risen, but profits for Chinese manufacturers have fallen sharply.
Tariffs that protect a domestic industry from the whole rest of the world are the ones that domestic consumers have to absorb - not tariffs against one bad actor, who has plenty of competitors ready to step in.
We’ve committed $28B to the farmers so far and the Chinese aren’t buying. What makes you think we won’t bail them out for next year’s lost sales as well?
More importantly you’re ignoring the other negative effects on the economy. Deere and Cat have both taken earnings hits and lowered guidance because of lower demand from farmers and higher steel costs due to tariffs.
I’m sure there are thousands of other businesses impacted who aren’t getting the farmers’ bailouts.
You paint an idyllic picture where we can collect $80 billion from our consumers, seriously reduce exports and raise the costs to our manufacturing companies, all without consequence.
That’s just whistling past the graveyard and the markets and corporate America are starting to tell you so.
“We’ve committed $28B to the farmers so far.”
$28 billion was budgeted for the last year and the coming year combined. So yes, I think we will bail farmers out next year - the money ($16B) has already been identified, and is included in that $28B. Billions are spent supporting farmers every year, for crop losses or trade issues (floods were big this year). This money budgeted for trade effects on Farmers is not a major divergence from the typical Farm Bill budget for bailouts - just more skewed toward trade effects than natural disasters.
Caterpillar, (along with Apple and Boeing), is one of the few big American companies with significant sales in China, that took hits there because of the trade war. Despite that, their overall sales were up 3% in the second quarter, year to year - so no downturn due to American farmers finances (farmers trade losses were bailed out, of course). Apple also made up their sales and was up overall last quarter (partly because of competitor Huawei’s trade problems). Boeing took a much bigger hit from their 737 Max product failure. Because they maintain a several year waiting list for their product, the loss of Chinese orders would not effect their quarterly, or annual sales.
Even our most heavily exposed firms are more effected by other factors, than by the trade war with China - and this was the period when China did their worst, trying to match our tariffs and dissuade any more.
US markets continue to set new records, and corporate earnings have been the main driver - so neither our markets or actual corporate performance really indicates “the graveyard”.
Consumer earnings surged last quarter (over 5%), and inflation was low (under the Fed’s goal of 2%), so consumers are far from suffering - a better than 5% rate of income growth is approaching boom times, far better than our long term average.
The bottom line is that we don’t have so much to lose in a trade war with China - we only export about $100 billion per year to them, out of our $20 trillion GDP - just 1/2 of a percent. We are losing massively from the status quo.
Our annual losses to IP theft by China are around five times our total annual exports to them - and those losses are not just a one time transaction, but result in a longer term stream of losses, including whole businesses, with their jobs supply chains, profits and tax revenue. Our industry has been being ripped off wholesale and transplanted to China for the last quarter century. Just slowing or stopping that is worth more than our annual exports to China.
They export more than four times as much to us, so a 25% tariff takes in the total value of our exports to them. Any serious short term effects on particular businesses (like farmers) can be managed though long established Government mechanisms, for less than the tariff revenue.
The 2017 tax reform, deregulation, the shale oil/gas revolution - even the quarter point interest rate cut - have more of a macroeconomic effect on the American economy, than the costs of our trade war with China.
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