Free Trade

Trump's Agriculture Department Just Called Bull on a Key Part of His China Trade Deal

Instead of $12.5 billion in new agriculture purchases exports to China this year, the USDA expects less than $4 billion.

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When he inked a so-called "phase one" trade deal with China last month, President Donald Trump touted it as a major win for American farmers. It would be so great, he said, that farmers would have to buy "more land" and "bigger tractors."

As part of the deal, China agreed to buy $40 billion worth of agricultural goods annually, an increase of about $16 billion over the pre-trade war baseline, with $12.5 billion of that increase coming this year. Now, new projections released by the U.S. Department of Agriculture (USDA) suggest China will buy less than a third of that promised increase.

This should not be a surprise to anyone except the president. Even before the deal was signed, economists were questioning whether China's promised farm purchases were realistic. Chad Brown, a senior fellow at the Peterson Institute for International Economics, a trade-focused think tank, wrote that the export targets set by the phase one agreement were so "unrealistic" that the entire deal could be in jeopardy.

After all, the record value for all American farm exports to China in a single year is about $26 billion, set in 2012. If you include fish and forestry products, that record total rises to $29 billion. Even if China bought all American exports of corn, soybeans, wheat, and pork, and the total would barely exceed $50 billion a year.

Like so much else about the trade war, the promised "win" for American farmers had more to do with politics than economics. The deal with China was never about settling any of the underlying economic issues between the two countries. But it lets Trump talk about how he stood up to China as he runs for reelection.

"The deal is structured so that the evidence of shortfalls in those Chinese purchase pledges won't be clear until after the presidential election in November 2020," Brown noted last month. That's not an accident.

Now even Trump's own Agriculture Department is disputing the president's numbers. The agency is projecting a $3.9 billion increase in agricultural exports to China this year, Bloomberg reports. The one caveat is that the new projections look only at the current federal fiscal year—which ends on September 30—leaving open the slim possibility that China could hike purchases by a whopping $10 billion during this year's final quarter.

The increasingly unavoidable conclusion is that Trump greatly exaggerated the extent to which his deal would make up for the pain farmers have suffered during the trade war. On Friday morning, Trump seemed to cop to that reality by tweeting out a promise to continue bailing out farms if China's agriculture purchases don't meet expectations.

It should go without saying that "tariff money coming into the USA" is coming out of the pockets of American consumers, manufacturers, and farmers, because that's how tariffs work.

All of this matters for two reasons. First, politically, Trump may have cost himself a smaller victory by promising a bigger one. China is still going to increase farm purchases by nearly $4 billion, if the feds' projections are correct. That's a big number! But Trump's seemingly uncontrollable urge to self-aggrandize now puts him in the position of having to explain why his deal has not lived up to expectations.

Second, China's inability to meet those unrealistic demands could give the White House a warped rationale for reigniting hostilities if Trump wins reelection. It's not at all difficult to imagine Trump, or economic advisors like Peter Navarro, pointing to slower-than-expected growth in farm exports to China as proof that Beijing has not held up its end of the bargain and then using that to justify more tariffs or other counterproductive strategies.

"With unrealistic export targets, the deal may be doomed from the start," Brown warned last month. "Even worse, hostilities might renew, leading to a re-escalation of trade tensions currently on hold."

Trump told farmers he was delivering a big win. Instead, they might get more of the same.

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  1. Shhhh! Face-saving facades only work as long as nobody points out the emperor’s clothes are a bit short.

    1. Rather than showing Trump exaggerated the benefits of his China deal, the better comparison is to compare other president’s exaggerated benefits compared to what they actually delivered. I’d prefer our presidents not lie and exaggerate, and even more I’d prefer our media apply the same standards to all presidents.

      I expect Trump to exaggerate, just like every previous president, but in the manner of a New York salesman. At least his results are in the direction he’s promising, rather than in the opposite direction. Such as Bush’s promise of a “humble foreign policy” or Obama’s promise of economic recovery from his huge stimulus that made things worse than his advisors projected would happen if they did nothing.

  2. Today’s JournoList article number two. See also De Rugy, Veronique.

    1. +100000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

      unreason staff have been perusing the comments today and got all butthurt, so they sent in the sock trolls.

      1. I wonder which one’s Suderman’s sock? I think Tony/aleftist is probably Welch.

      2. Do they have Hihn in a facility somewhere? When they’re mad they just take him off his meds and give him internet access?

    2. No kidding. Typical lefty lib article. We only increased our exports by $4 billion (from $22 billion to $26 billion), not $12 billion. I don’t guess limitations on logistics or production capacity played any role. Some people have no clue.

  3. How dare you suggest Trump is engaged in base politics! The man is a hero.

    1. The only sandwich he knows anything about would be two women giving golden showers.

      1. The greatest sandwich of all time. You’ve never had a sandwich like this, believe me.

      2. Poop eaters like Hihn probably shouldn’t be talking about golden showers.

  4. It’s still $4 billion more than Boehm thought Trump would get.

    Poor Boehm. I hope he tells us what tear flavored chipotle tastes like.

    1. It can’t be as great as a Trump-voting farmer whining about foreclosure, eating his goofy red hat on the day after the bankruptcy filing, and still being too stupid to recognize what has happened.

  5. WHO will protect us all from all of this “winning” by Dear Leader Trump??!?!

    Trump has got us stumped! Dems ain’t gonna save us, Comrade Bernie ain’t gonna save us… Libertarians COULD save us, but WHO will remove the Kryptonite Shackles of “ain’t gonna waste my vote” from the Libertarian Super-Hero!?!?!?

  6. Trump is a stable genius. That’s why the deficit is skyrocketing, growth is t lower than Obama’s later years, wages are stagnant, labor participation rate is flat, and we’re paying a hidden tax from his inane trade wars and associated bailouts. I’m exhausted from all this winning

    1. “I’m exhausted from all this winning”

      Me too! I approve of this message!

    2. When this economy is not good for you, I’m beginning to think that none will be.

      1. Tell that to the farmers.

        1. Farming is very lucrative.

          You soy and “organic” dipshits pay top dollar for food that is grown very similarly to nonorganic food and my markup is 50%+.

          1. Very nice. It’s always good to separate useless urban progtards from their dollars. I’m debating on marketing a bunch of anti Trump products. Then donating half the profits to his 2020 campaign. Then send an email to everyone on the customer list after he wins explaining that, and how his re election might not have been possible without their purchase.

            I make my own fun.

  7. Wait, you mean they might not do everything they promised?

    When someone agrees to buy something best to see if they can deliver on the payment.

    Which reminds me of an old joke:

    guy goes into a bar, orders four shots of the most expensive 30-year-old single-malt Scotch and downs them one after the other. The barkeep says, “You look like you’re in a hurry.” “You would be too if you had what I have,” said the guy. “What have you got?” “Fifty cents.”

    1. It was clear from the start that the “China trade deal” became the “phase one” trade deal with a bunch of wishy-washy unenforceable commitments by China solely because Trump was desperate for a “win” and the Chinese understood that perfectly about him. He was played.

      1. She desperate to downplay Trump’s successes. Do you at least get Trump to pay you rent for the space he occupies in your head?

  8. Eric not much of a strategic thinker, those numbers are set up to fail…the admin wants such failure as further justification of tightening the screws on china more down the road…poor eric

    1. Aha. The old “OK team. I want you to fumble the ball this time so next quarter we can really get ‘em with a comeback score when they least expect it” strategy.

      I think the Browns tried that all season actually.

      1. oookkkkkk….your point being what, dullard?……not sure what the Browns had to do with it….but in real history such things have worked…like Bismarck suckering in France in 1870 into a war…really dude go play video games in your basement, your mom will bring you lunch

        1. Cool. Could you do me a favor and tell her to use the brown mustard this time? And I could use another coke. I’m in the middle of something here and it’s a tournament.

        2. I know I’m being snarky but think about it.

          Trump drops some of the tariffs which is what the Chinese want. Now they can sell more stuff.

          In exchange China drops some tariffs which results in the US buying more stuff. In addition they promise to buy more of certain things like ag products and farm equipment.

          China buys whatever they need and would have bought anyway. Not as much as promised.

          A year later they sit down. US says they did not keep up with the deal. Chinese say that it has been a rough year. Wuhan caught a bad cold, our pigs have the flu, exports are down.

          So China got everything it wanted or needed. Trump looks like a shmuck because the salesman of the century did not deliver.

          He could up the tariffs again but that is admitting failure. Or we could just move on and reduce more trade barriers which will end up about where we started.

          The promise on IT. Well those don’t mean much. There might be some improvement but the Chinese will only do what is in their best interest as they always have and so should anyone.

          What kind of strategy is that?

          The only reason to put any quotas in there is based on the mistaken belief that trade deficits are bad which Trump actually believes to be true.

          We produce more soybeans and make the best farm equipment on the planet. We don’t need a salesman in chief to negotiate deals for us.

  9. Thanks to the Corona virus, China won’t be buying a lot of stuff for quite a while.

    It’s either ignorance or mendacity to call it “Trump’s Agriculture Department”. That outfit is full of the same sort of apparatchiks populating the rest of the agencies who hate his guts and do what they can to sabotage his initiatives.

    1. Clearly, the only job requirement henceforth shall be “loyalty.”

      Can’t wait to see how much “winning” we’ll see, once the purges are complete.

      1. Well, you’re going to be seeing a lot. More leftists losing here as the year goes on.

    2. So the Ag dept knows the real numbers are much higher.

      They release the false low report numbers causing Trump points to fall. Then later when the actual high numbers come in they gain it all back by showing what a great job they have done for farmers.

      Aha.

      Except a very stable genius would know the swamp critters would lie and retaliate by firing them all. Then when the good numbers came in he would claim credit having gotten rid of the terrible staff.

      There is more.

      The Ag knows that he knows so they would just report the true number which is the low estimate in the first place and Trump loses twice.

      Never trade wits with a Sicilian when soybeans are on the line.

  10. The Trump administration let China hold off on a lot of those purchases and compliance with the trade deal because they had to dump a ton of money into coping with the coronavirus. This was discussed by the Trump administration weeks ago.

    Maybe you should read the business news sometime, Boehm, you 12-year old fucktard.

    https://www.cnbc.com/2020/02/04/coronavirus-will-delay-export-boom-from-us-china-trade-deal-kudlow.html

    1. I dunno.

      Sure you can expect some impact which the article you linked was expected to be “very minimal”. This projects they would buy less than 1/3 of what they said. Plus it is food not consumer goods. People and animals still gotta eat. I have seen reports all along that some of these numbers on stuff like soybeans were just too high to be credible.

      So some of that could be due to the virus but I am skeptical that is the whole story. It is not like China lost 2/3 of its people or cash reserves.

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  13. Than the great step toward to increase farmer income we are waiting when trump going to do trade deal with us with India so that also we both country grow fast .

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  16. For a bunch of supposedly anti-government libertarians, ‘reason’ is awful quick to take the side of the deep swamp bureaucracy. Oh well, consistency is for the little people, right?

    This comment not approved by Silicon Valley brain slugs.

    1. Is that a call to order for another rousing meeting of Libertarians For Tariffs And Protectionism?

      Carry on, clingers. Until replacement.

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  20. “It should go without saying that “tariff money coming into the USA” is coming out of the pockets of American consumers, manufacturers, and farmers, because that’s how tariffs work.”

    Reason, showing their economic dishonesty yet again.

    In all but perfect demand inelasticity, Xi eats some of the tariff, those who purchase Xi’s slave produced geegaws the other, and the rest of America gets lower government debt.

    Wasn’t Reason pretending that they cared about lowering the debt the other day?

    Reason has yet to explain why it’s preferable to tax American workers over Xi’s slave produced geegaws.

    “Libertarian Moment”

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