Yesterday President Trump poured more fuel on the flames of the trade war with China, proposing to slap an additional $100 billion in tariffs on China. This is on top of the $50 billion he has already proposed. You can expect the markets to respond very unfavorably today to this latest escalation of Trump’s China bashing. Thursday night the Dow Jones industrial average futures trading was down 350 points on the latest tariff threats.
“In light of China’s unfair retaliation, I have instructed the United States Trade Representative to consider whether $100 billion of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs,” Trump said on Thursday.
Iowa’s Republican leaders would be climbing over the White House fence in protest if President Obama had damaged Iowa agriculture so severely. Republicans would be demanding Obama’s impeachment if he had started a trade war with one of Iowa’s largest agricultural customers.
Will Governor Reynolds, Senator Ernst and Senator Grassley finally find their voice and demand Trump stop destroying the Iowa economy? Will Congressman Blum, King and Young finally grow a spine and stand tall against Trump’s out of control trade war? Trump must be stopped before this trade war goes any further.
China retaliated within hours after Trump initially imposed $50 billion in tariffs on them. The stock markets immediately reacted by plunging on that news. The markets had recovered some of the week’s losses as Trump’s economic adviser, Larry Kudlow suggested the initial $50 billion was negotiable.
Now, rather than calm the markets, Trump has lobbed another even larger trade war threat at China. By 10 pm last night CNBC was quoting Wall Street veteran Peter Bookckvar. Bookckvar, chief investment officer at Bleakley Advisory Group, is predicting that Trump’s latest $100 billion threat will shake the markets.
“Markets are deservingly losing patience with the administration’s approach to this … Any hope that this spat with China was going to stay contained with an ultimate agreement at the end of the day just got thrown under the bus,” Boockvar said.
Iowa agriculture was already reeling from China’s retaliation with 25% tariff on Iowa soybeans and pork.
The National Pork Producers Council (NPPC) has repeatedly warned that tariffs will harm the pork industry. China is the second largest market for pork exports.
“We sell a lot of pork to China, so higher tariffs on our exports going there will harm our producers and undermine the rural economy,” said NPPC president Jim Heimerl. “No one wins in these tit-for-tat trade disputes, least of all the farmers and the consumers … We also expect all countries to resolve trade disputes in a way that doesn’t harm businesses, farmers and consumers.”
John Heisdorffer, a Keota, Iowa farmer, and the president of American Soybean Association has also warned of the tariff danger to Iowa farmers.
“I’m a farmer from Iowa, and someone is messing with my biggest market; that’s frustrating,” Heisdorffer said. “We send $14.6 billion in soybeans to China, equivalent to nearly 1 in every 3 rows of beans we grow, and more than the rest of the world combined.”
Republicans celebrated the elevation of Governor Terry Branstad as U.S. Ambassador to China. They promised he would expand Iowa agricultural exports because of his special personal relationship with China’s President Xi Jinping. Apparently, Branstad’s bromance with Xi Jinping has cooled substantially.
Have Iowa Republicans lost Branstad’s phone number? He should be called home immediately and grilled on his lack of action on the increasing tensions between the two countries.
by Rick Smith