The news from today’s meeting between President Trump and European Commission President Jean-Claude Juncker on trade policy is encouraging.
EU Commission President Juncker says US, EU agree to hold off on further tariffs as part of trade talks.
Trump says the US and EU have agreed to work to resolve US tariffs on steel and aluminum imports.
President Donald Trump said Wednesday that he and European Commission President Jean-Claude Juncker agreed to work toward eliminating tariffs and barriers on trade, reducing tensions for now in a brewing trade war.
Trump said both sides agreed to halt for now tariffs that threatened to devolve into a trade war as negotiations proceed…
“We should talk about reducing tariffs instead of increasing them,” Juncker said, as Trump nodded. The president again suggested the two sides could one day have no tariffs or barriers or subsidies on their products.
An earlier AP story pointed out the tariffs were already hurting the automobile industry.
An escalating trade war and steep tariffs on steel and aluminum is putting pressure on earnings for automakers, prompting General Motors to slash its outlook while also weighing down shares of Ford Motor Co. and auto parts companies.
GM cited “recent and significant increases in commodity costs” for why it now expects 2018 profits of $5.14 a share, down from its previous forecast of $6 and below analysts’ expectation of $6.42.
So, maybe we’re seeing some progress. U.S. farmers would prefer the trade wars abated, despite promises of cash assistance – promises strongly resisted by free traders.
Many farmers remain critical of President Donald Trump’s tariffs and the damage done to commodity prices and markets but were appreciative Tuesday that he offered to provide some cash to help offset their losses.
The U.S. Department of Agriculture announced a $12 billion three-part plan that would borrow money from the U.S. Treasury to pay producers of soybeans, sorghum, corn, wheat, cotton, dairy, and hogs.
Route Fifty reports on the opposition to the proposed “short-term” fix.
“This trade war is cutting the legs out from under farmers and the White House’s ‘plan’ is to spend $12 billion on gold crutches. America’s farmers don’t want to be paid to lose—they want to win by feeding the world,” Sen. Ben Sasse of Nebraska said in a statement. “This administration’s tariffs and bailouts aren’t going to make America great again, they’re just going to make it 1929 again.”
A simpler solution would be to reverse the original tariffs, said Sen. Rand Paul of Kentucky.
“If tariffs punish farmers, the answer is not welfare for farmers,” Paul wrote on Twitter. “The answer is remove the tariffs.”
Earlier, we have written that the tariffs are already dampening market growth in China for Washington cherry growers, that economists fear escalating trade wars threaten to lead to a 2020 recession, and that West Coast states are at greatest risk from trade conflict with China.
So apparent progress in negotiations with Europe, while welcome, still leave a lot unresolved. Kris Johnson, president of the Association of Washington Business, put it in perspective in a recent column:
Washington state leads the nation in exports per capita and ranks third in overall exports, according to the latest figures from the U.S. Census Bureau. Forty percent of Washington jobs are related to trade in some way, according to the Washington Council on International Trade.
That includes everything from apple growers in Wenatchee, french fry manufacturers in the Tri-Cities and boat builders in Kitsap County to music stand makers in Yakima and farmers and manufacturers in every corner of the state.
So, while there are justified concerns about some of our partners’ trading practices — and renegotiating trade agreements can help ensure fairness and mutually beneficial deals that support American companies — we need a thoughtful, strategic approach that ensures the U.S. remains a trade leader.